Tata Capital has long been one of the most sought-after names in India’s unlisted market. Backed by the Tata Group’s legacy, solid financial performance, and a diversified presence across lending, housing finance, and wealth management, the company naturally attracts investor interest. But in the wake of the HDB Financial Services IPO debacle, sentiment across the unlisted ecosystem has shifted—forcing investors to reassess whether Tata Capital’s soaring price is justified or just another example of fear of missing out (FOMO) driving the market.
Why Is Tata Capital in Focus?
Tata Capital’s fundamentals remain strong. It has shown consistent growth across its core verticals—retail lending, housing finance, and wealth advisory services. As part of the prestigious Tata Group, it enjoys the perception of stability, credibility, and trustworthiness.
The buzz around its upcoming IPO has only added fuel to the fire. Over the past year, prices in the unlisted market surged past ₹1000 per share, as retail and HNI investors scrambled to grab a piece of what they believed to be a “safe” pre-IPO bet.
But as seasoned investors know, brand ≠ value. Even the best businesses can deliver poor returns if bought at the wrong price.
HDB Financial Services: A Cautionary Tale
The recent public listing of HDB Financial Services, a highly anticipated IPO from the HDFC Group, serves as a timely reminder.
HDB shares were trading at ₹1100–₹1200 in the unlisted market before the IPO announcement. But when the IPO was finally priced at ₹740 per share, the market was stunned. Those who had entered early—say, at ₹550—still made strong returns. But late entrants, chasing the hype, were left nursing immediate paper losses.
This episode highlighted a crucial truth: in unlisted investing, just like in listed markets, entry price and timing matter enormously.
Valuation Check: Is Tata Capital Overpriced?
Let’s put Tata Capital’s pricing into perspective. In the listed space, most NBFCs trade between 4x–6x Price-to-Book (P/B).
Now consider this: at ₹1000+ per share, Tata Capital is trading at nearly 15x P/B in the unlisted market. That’s not just a premium—that’s a red flag.
While the company is fundamentally strong, this kind of valuation stretch is hard to justify. And if the IPO is eventually priced closer to ₹400–₹450 per share—based on industry peer benchmarks—then investors entering at ₹1000 could be staring at steep mark-to-market losses.
Entry and Exit: Learn from the Past
The most successful unlisted investors follow a disciplined approach:
- Enter at a fair valuation
- Exit when the price runs ahead of fundamentals
- Avoid emotional decisions based on hype
Let’s look at some real outcomes:
- HDB Financial Services
- Entry at ₹550 → Exit at ₹1100 → Strong returns
- Entry at ₹1100 → IPO at ₹740 → Immediate losses
- Tata Capital
- Entry at ₹400–₹700 → Exit at ₹900–₹1100 → Profitable
- Entry now at ₹1000+ → IPO at ₹400? → Risk of loss
What to Expect from Tata Capital’s IPO?
Market expectations suggest that Tata Capital’s IPO may be priced in the ₹400 range—more aligned with peer NBFCs and fair value estimates.
This has several implications:
- If you’ve entered at a lower price, this is a good opportunity to book profits.
- If you’re planning to enter now at ₹1000+, ask yourself—are you buying value, or buying the brand?
Final Thoughts: Timing Is Everything
Tata Capital is undoubtedly a well-managed business with a credible promoter group. But even great companies can turn into bad investments if bought at inflated prices.
In the unlisted space, returns are mostly locked in at the time of entry, not at IPO. Unlike listed markets, liquidity is thin, exit opportunities are fewer, and mispricing is common.
