Tata Capital's Rs 15,512 Crore IPO Subscribed Less Than Twice Despite High Valuation
Tata Capital's Initial Public Offering (IPO), the largest of the year so far at Rs 15,512 crore, was subscribed less than twice, with a 1.95 times subscription. This was despite being priced in the range of Rs 310-326 per share, valuing the Non-Banking Financial Company (NBFC) at about Rs 1.38 lakh crore.
The IPO saw varied interest from different investor segments. Qualified Institutional Buyers (QIBs) quota was subscribed 3.42 times, while non-institutional investors (NIIs) and retail investors were subscribed 1.98 times and 1.10 times respectively. Notably, the employee segment received 2.92 times the bids. However, the overall subscription was lower than expected, with the IPO subscribed less than twice.
Financial analyst S.P. Tulsian, on his platform SPTulsian.com, analysed the unexpectedly low subscription and a drop in the Grey Market Premium (GMP) to Rs 2, indicating a muted listing. This comes amidst a governance crisis within the Tata Group, with internal conflicts within Tata Trusts affecting the group's vision and market value. The Tata Group has lost over $70 billion in market value this year, with shares of 12 firms declining.
Tata Capital's IPO, despite being the largest of the year, saw a muted response from investors. The low subscription and reduced GMP raise questions about investor confidence in the Tata Group, especially given the ongoing governance crisis. The group's market value decline this year underscores the need for resolution in these internal conflicts.
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