That’s nearly a 56% discount to its last traded price of Rs 735 in the unlisted market, and a staggering 71% lower than the April peak of Rs 1,125. For those who bought at the top, the stock would need to list at more than 125% above the IPO price just to break even, which is an unlikely scenario.
Not the first time
This isn’t the first time investors in the shadowy world of unlisted shares have been left smarting. HDB Financial Services’ IPO was another example, where it was priced nearly 40% below its last traded level in the unlisted market. The precedent highlights a recurring mismatch between private-market euphoria and public-market reality.
What should investors do now?
For retail investors considering the Tata Capital IPO, the focus should shift from the unlisted premium to fundamentals. The company reported a profit after tax of Rs 3,655 crore in FY25, serves over 70 lakh customers across 25 lending products, and is one of the largest upper-layer NBFCs under RBI’s mandate.
The IPO is expected to strengthen its Tier-1 capital base, supporting future lending growth.Still, listing-day fireworks may be subdued given the supply overhang from Tata Sons’ and IFC’s combined Rs 9,000-crore offer for sale.Analysts advise investors to temper expectations and approach the IPO as a long-term financial sector bet rather than a quick listing-gain play.
Private market frenzy: Groww, NSE cautionary tales
The Tata Capital episode is unfolding just as other high-profile unlisted names are drawing heavy buying. Online broker Groww’s unlisted shares have seen frenzied demand ahead of its Rs 6,000–7,000 crore IPO planned for November, with investors chasing valuations of $7–9 billion.
Meanwhile, the NSE’s unlisted shares are down nearly 20% from their peak, another reminder of how quickly sentiment can shift.
Also read: Bulls lick their wounds as two-thirds of Nifty 500 stocks trade below last year’s levels
“Investors running behind unlisted shares at any price reflects a broader trend in India’s fast-evolving private market ecosystem,” said Tejas, Vice President – Marketplace at Qapita.
“With new liquidity channels opening up, sellers are often tempted to anchor their asking price to potential listing valuations, rather than allowing the market to naturally discover fair levels.”
Even industry veterans have cautioned restraint. Zerodha co-founder Nithin Kamath earlier warned of the risks. “Most investors think they can make easy money by picking these pre-IPO companies, waiting for the IPO, and making big listing gains. But it’s not as easy as it sounds, and there are all sorts of risks.”
Also read: Too many IPOs, too little returns? GMPs suggest cautious trends for 9 listings tomorrow
For Tata Capital, the IPO is a milestone in its 18-year journey, but for unlisted investors who bought into the hype, it is a harsh reality check. For public-market investors, the choice is clearer to look beyond the grey market noise and weigh the company’s fundamentals against its valuation.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
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