Tata Investment Shares Surge 8% as Tata Capital Board Approves IPO Plan
Tata Investment Shares : Shares of Tata Investment Corporation Ltd surged over 8% in early trade on February 25 after Tata Capital’s board officially approved its much-anticipated initial public offering (IPO). The IPO, expected to be one of the largest public issues from the Tata Group, will comprise a combination of a fresh issue of 23 crore equity shares and an offer-for-sale (OFS) by existing shareholders.
Tata Investment Stock Soars Amid IPO Excitement
The announcement sparked enthusiasm among investors, sending Tata Investment Corporation’s stock price soaring to an intraday high of ₹6,230 per share on the National Stock Exchange (NSE)—an 8.24% jump from its previous close. The stock later settled at ₹6,136, still up 6.61% by 9:55 AM.
This IPO marks a significant milestone for the Tata Group, as it will be the first public listing by a Tata company since the blockbuster debut of Tata Technologies in November 2023. The development underscores Tata Capital’s ambitions to expand its financial footprint and comply with regulatory mandates.
Tata Capital’s IPO: A Regulatory and Strategic Move
Tata Capital’s decision to go public aligns with the Reserve Bank of India’s (RBI) regulations, which require upper-layer non-banking financial companies (NBFCs) to list on stock exchanges within three years of their classification. With a deadline set for September 2025, the Tata Group has taken proactive steps to ensure compliance while unlocking shareholder value.
The IPO plans had been in motion for some time. On December 24, 2023, reports surfaced that Tata Capital had initiated work on a ₹15,000 crore-plus IPO, enlisting the expertise of legal advisory firm Cyril Amarchand Mangaldas and Kotak Mahindra Capital to oversee the process.
Tata Capital’s Market Position and Business Overview
Founded in 2007, Tata Capital is a leading financial services firm that provides a wide array of lending solutions, including housing loans, personal loans, and business financing. The company is a subsidiary of Tata Sons, which holds a 92.8% stake in Tata Capital as of March 2024.
Tata Investment Corporation, another crucial player within the Tata Group’s financial ecosystem, has a 68.51% stake owned by Tata Sons Private Limited, according to exchange data for Q3 FY24.
Tata Investment’s Financial Snapshot
Investors closely monitoring Tata Investment Corporation’s financials should note key metrics:
| Metric | Value |
|---|---|
| Market Cap | ₹31,328 Cr. |
| Current Price | ₹6,192 |
| 52-Week High/Low | ₹9,757 / ₹5,145 |
| Stock P/E | 93.6 |
| Book Value | ₹7,266 |
| Dividend Yield | 0.43% |
| Return on Capital Employed (ROCE) | 1.67% |
| Return on Equity (ROE) | 1.55% |
| Face Value | ₹10.0 |
| Promoter Holding | 73.4% |
| Debt-to-Equity Ratio | 0.00 |
| Price to Earnings (P/E) | 93.6 |
| Pledged Percentage | 0.00% |
| Quarter-on-Quarter (QoQ) Profit Change | -84.2% |
| Quarterly Profit Variation | -63.2% |
| Industry P/E | 20.1 |
| Graham Number | ₹3,289 |
| Intrinsic Value | ₹3,109 |
| Relative Strength Index (RSI) | 46.6 |
| Earnings Per Share (EPS) | ₹66.2 |
| Number of Equity Shares | 5.06 Cr. |
| PEG Ratio | 3.97 |
| 200-Day Moving Average (DMA) | ₹6,243 |
| Free Cash Flow (3-Year) | ₹586 Cr. |
| Free Cash Flow (Latest Year) | ₹235 Cr. |
| Total Debt | ₹0.00 Cr. |
What This Means for Investors
With the upcoming Tata Capital IPO, investors are speculating about potential value unlocking within the Tata Group’s financial ecosystem. Tata Investment Corporation, which serves as an investment arm for the group, is expected to benefit from Tata Capital’s market debut, further enhancing its long-term growth potential.
Despite a high P/E ratio (93.6) and declining profits in recent quarters, the company remains financially strong with zero debt and substantial free cash flow. Its strong promoter holding (73.4%) also reflects stability.
Conclusion
Tata Capital’s IPO is poised to be a landmark listing, drawing significant interest from institutional and retail investors alike. As Tata Group accelerates its expansion in the financial services sector, this move could further solidify its market leadership.
Investors should keep an eye on upcoming developments, including the IPO timeline, pricing details, and subscription demand, as these will play a crucial role in shaping the future valuation of Tata Investment Corporation and Tata Capital in the stock market.
With the buzz surrounding this IPO, Tata Investment Corporation’s shares could continue to witness heightened investor interest, making it a stock to watch in the coming months.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.