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tata capital ipo

The IPO of Tata IPO, the country's famous finance service providing company, was listed in the stock market today. The company made profits for investors who invested money through its listing. If we look at the data, investors got a profit of 1.2 percent on the investment of Rs 14,996. Although the IPO may not have given much returns to the investors with its listing at Rs 330, brokerage firms are expressing confidence in the share. JM Financial estimates that the share can go up to Rs 360. That means it may see a rally of 9 percent.

A Tata Group company had set a target of raising Rs 15,512 crore through its much-awaited IPO. In this, new shares worth Rs 6,846 crore were issued and existing promoters sold shares worth Rs 8,666 crore. Tata Sons and International Finance Corporation (IFC) offered 26.58 crore equity shares for sale. The company's Kaipo was open from 6 to 8 October. Being a big company, investors expressed confidence in it and it received more than 2 times the subscription.

brokerage estimate

In the Money Control report, JM Financial says that Tata Capital has a large portfolio of 25+ loan products, which is divided into three main businesses. 61% retail finance, 26% SME and 13% corporate loans. TCL's AAA stable credit rating allows it to get funding at affordable interest rates. But, due to increasing competition from banks and higher share of secured loans, its NIM (Net Interest Margin) is 5-5.5%, which is slightly lower. Nevertheless, due to low credit cost, its return on assets has been 2.1-2.5%. JM Financial expects TCL's assets under management to grow at 20% CAGR in FY25-27, operating expenses to remain stable, and credit costs to gradually decline from FY26 onwards. With this, profit after tax can increase by 34% CAGR and ROA can reach 1.9% and ROE can reach 13.2% in FY-27.

JM Financial believes that Tata Capital has a strong business model as it offers a wide range of loan products and can access funding cheaply due to its AAA rating. However, due to competition from banks, its profit margin is slightly less. Nevertheless, the company's AUM is expected to grow at a pace of 20% in the next few years, and profits are expected to grow at a CAGR of 34%. According to valuation, its share price is decent, which is between companies like HDB and CIFC. Master Capital says that Tata Capital is India's top NBFC and is good for long-term investment. Those in IPO should hold shares and the rest should think of buying when the price comes down.

Buy or Sell?

Master Capital Services says that Tata Capital is India's third largest NBFC, which has given loans to 73 lakh customers since 2007. Its 25+ loan products and strong presence in retail, corporate, housing finance make it a good option for long-term investment in India's financial sector. It is advisable that those who get shares in IPO should hold it for the long term. Those who did not get shares in the IPO can buy them if there is a slight fall in the share price.

(Disclaimer- TV9 Hindi does not advise investing in any stock. This news has been written quoting the report only for information. Before investing, definitely take expert opinion.)