Tata Capital shares surge in unlisted markets; valued as the 3rd biggest NBFC after Bajaj twins
Tata Capital, now valued at ₹1.5 lakh crore on the platform for unlisted stocks, is the third biggest non-bank lender by market capitalisation - just after the Bajaj twins. The scrip trades in the range of ₹400 to ₹425 in the unlisted market, a report by ET stated.
Tata Capital, the mutual fund and lending arm of the Tata Group, has received significant investor interest in the unlisted market since the introduction of the stock there about six months ago. The scrip trades in the range of ₹400 to ₹425 in the unlisted market, a report by The Economic Times stated.
The company, now valued at ₹1.5 lakh crore on the platform for unlisted stocks, is the third biggest non-bank lender by market capitalisation - just after the Bajaj twins, it highlighted.
Bajaj Finance currently has a market capitalisation of ₹4.47 lakh crore, whereas Bajaj Finserv and Jio Financial Services command market capitalisations of ₹2.53 lakh crore and ₹1.37 lakh crore, respectively, added ET report.
Market experts believe that Tata Capital shares are rising due to the market performance of the IPO-bound Tata Technologies, said the market daily. Tata Technologies is trading at a premium of ₹300 a share compared with its anticipated issue price, it said.
"Tata Capital shares are currently traded privately at ₹400-425 apiece. The stock, which started trading five months back, hit a record high of ₹500 in August. This optimism is driven by the expectation of a listing occurring in the next 12-18 months at a substantial premium," Narottam Dharawat of Mumbai-based Dharawat Securities told ET.
As per the market participants, the stock is traded nearly nine times the book value per share and is expensive in the sector, it noted.
"The stock is trading at a premium compared to its industry peers, and investors should exercise caution at these price levels. Considering the recent rights issue announcement at ₹162 per share, investors should be mindful of the current substantial premium," Sambhav Aggarwal, director of Shri Parasram Holdings, a Delhi-based firm that deals in listed and unlisted shares, was quoted as saying.
In September 2022, the Reserve Bank of India (RBI) had classified both Tata Capital and parent Tata Sons Ltd among the 16 ‘upper-layer’ NBFCs, requiring them to go public within three years from the date of the categorisation. In Tata Capital’s case, the deadline is September 2025. Under RBI guidelines, NBFC-ULs have to implement a board-approved policy for adopting the enhanced regulatory framework applicable to them and mandatorily list within three years of this, said the report.
In August, fair trade regulator Competition Commission of India (CCI) approved the merger of Tata Cleantech Capital and Tata Capital Financial Services into Tata Capital Ltd. Tata Capital Financial Services (TCFSL) and Tata Cleantech Capital Ltd are RBI-registered non-deposit accepting non-banking financial companies. Both companies are subsidiaries of Tata Capital Ltd (TCL), it added.
In FY23, the company issued and allotted 44 million shares of ₹10 each at a premium of ₹125.10, aggregating to ₹593.80 crore, on a 'rights basis' to the existing equity shareholders, said ET.
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