Tata Capital’s IPO has received a very lukewarm response on the very first day.
Tata Capital IPO has reached the last day of its subscription. Investors can subscribe to this IPO till 5 pm on Wednesday i.e. today. The special thing is that this IPO has not yet received the same response as the previous IPO. This issue has not received even 75 percent subscriptions for two days. However, on the last day it is expected that the IPO will be fully subscribed. But it is not expected to get as much subscription as Tata Tech got in its last IPO. Tata Tech had received subscription of more than 69 times. But at that time the IPO of the government company IREDA Company was in front. At that time that company had received less than 40 times subscription. This time South Korean electronics are in front. Which has achieved 105 percent subscription on the very first day. In such a situation, the question is whether Tata Group’s biggest IPO will prove to be a blockbuster or not.
Only 75 percent subscribed
The IPO of non-banking finance company Tata Capital Limited received 75 percent bids on the second day of share sale on Tuesday. According to NSE data, bids were received for 24,96,33,260 shares against 33,34,36,996 shares of the company. In the investor category, qualified institutional buyers (QIBs) received 86 per cent subscription, while non-institutional investors received 76 per cent bids. The retail individual investors (RII) category received 67 percent subscription. Tata Capital on Friday raised Rs 4,642 crore from 68 domestic and global institutional investors. Applications for the company’s public issue of Rs 15,512 crore can be submitted till Wednesday. The price range is Rs 310-326 per share.
How many shares is the company selling?
The valuation of the non-banking financial company (NBFC) sits at the upper end of the value range at around Rs 1.38 lakh crore. This initial public offering (IPO) of a total of 47.58 crore shares includes fresh issue of 21 crore equity shares and offer for sale (OFS) of 26.58 crore shares. Under the OFS component, Tata Sons will sell 23 crore shares, while International Finance Corporation (IFC) will sell 3.58 crore shares. Currently, Tata Sons holds 88.6 percent stake in Tata Capital, while IFC holds 1.8 percent. The proceeds from the IPO will be used to strengthen the Tier-1 i.e. share capital base of the company and to meet future capital requirements.
Only Rs 6 up in gray market
On the other hand, even in the gray market, Tata Capital’s shares do not seem to be performing well. On September 8, the company’s GMP is showing Rs 332 with a premium of only Rs 6. This means it is trading Rs 6 above the issue price. Whereas on 7th October and on 29th September the company’s shares were visible in the gray market at Rs 353. This means that the current GMP rate is seen to be about 6 percent below the level of September 29. If the company’s shares are listed between the issue price of Rs 326 and Rs 350, then the situation will be much better for the company.