Tata Capital, a prominent non-banking financial company (NBFC) in India, has recently entered the stock market with its initial public offering (IPO). On October 13, the shares debuted at ₹330, reflecting a 1.23% increase from the issue price of ₹326. Investors are closely monitoring the situation for further developments. The IPO was substantial, valued at ₹15,511.87 crore in total. The company issued 21 crore new shares, raising ₹6,846 crore, while existing shareholders sold 26.58 crore shares worth ₹8,665.87 crore. Despite the positive reception of the IPO, several risks warrant attention: Tata Capital’s acquisition of Tata Motors Finance has resulted in a portfolio with numerous non-performing assets (NPAs).
A rise in defaults from customers could lead to financial losses for the company. Additionally, the credit rating of Tata Capital is critical; any decline could increase borrowing costs and negatively impact the firm. Furthermore, the company’s heavy reliance on technology exposes it to potential cyber threats, similar to the recent attack on Jaguar Land Rover.