Tata Capital’s initial public offering (IPO) of $1.75 billion was .The listing attracted strong demand from institutional investors, making it India’s largest public offering this year so far.
INSTITUTIONAL INVESTORS LEAD THE CHARGE
The Mumbai-based financial services company, part of the Tata Group, saw bids worth Rs 109.7 billion ($1.24 billion). Qualified institutional buyers (QIBs) subscribed 1.2 times their reserved quota, while non-institutional investors put in bids worth 1.13 times their allocation. Retail participation was slightly muted, with a subscription of 0.84 times.
Prashant Tapse, senior vice president of research at Mehta Equities, noted that muted retail demand was partly due to attention shifting to LG Electronics India’s $1.3 billion IPO earlier this week, which offered both short-term listing gains and long-term growth prospects.
ANCHOR INVESTORS SUPPORT THE IPO
Ahead of the public offering, Tata Capital raised $523.2 million from anchor investors, including LIC and Norway’s sovereign wealth fund. The company is targeting a valuation of up to $15 billion, making it one of India’s largest non-bank lender listings.
Tata Capital ranks as India’s third-largest non-bank lender by revenue, after Shriram Finance and Bajaj Finance. The IPO includes up to 210 million new shares and the sale of up to 265.8 million shares by existing shareholders.
Tata Capital is scheduled to list on the stock exchanges on October 13. With strong institutional support and a reasonable valuation, the IPO is expected to perform well, although retail participation remains an area to watch.