Tale of the Tape 

Howdy folks. Welcome back to the Daily Rip!

Markets kicked off the week on a strong note, with the Nifty and Sensex ending up +0.7% each. The Nifty closed above the 25k-mark, but let’s not jinx it. Midcaps (+0.9%) saw strong buying, but Smallcaps (+0.3%) ended with minor gains. The advance-decline ratio was evenly split.

Most sectors finished in the green. IT stocks (+2.3%) were the star of the show, followed by Banks (+0.9%) and Oil & Gas (+0.8%). Metals (-0.9%) witnessed heavy selling pressure.

In today’s issue of the newsletter, we dive into Tata Capital’s big IPO, look at Nykaa (+7%) and Avenue Supermarts (-3%) Q2 updates, cover the day’s biggest newsmakers and more.

Check out the NSE 500 heatmap:

IPO
Big Numbers, Lukewarm Pop

Tata Capital IPO -- India’s biggest listing so far in 2025 -- is open for subscription! The price band is fixed at Rs 310-326 p/sh. The company aims to raise Rs 15,512 cr from the IPO.

In case you’ve been living under a rock, the company is the Tata Group’s flagship NBFC arm It’s India’s third-largest NBFC with an AUM of Rs 2.3 lakh cr as of June 2025. Fun fact: its loan book has grown at a CAGR of 37% over the last two years, which is INSANE. Most of its lending biz goes towards housing & LAP (~30% of AUM), with vehicle financing (~10%) also forming a decent chunk. Its asset quality also is better than peers (gross stage 3 loan ratio of ~2.1% vs industry average of 2.6%). That’s not bad considering it had a ~20% exposure to unsecured loans which is higher than most rivals.

FYI - the IPO’s offer for sale portion is around ~Rs 8,666 cr. The remaining Rs 6,846 cr is a fresh issue which will help boost the company’s Tier-1 capital.

FY25 Snapshot:

• Net Interest Income: Rs 10,690 cr; +57% YoY

• PAT: Rs 3,655 cr; +10% YoY

• Gross NPA: 1.9% vs 1.5% last year

• Net NPA: 0.8% vs 0.4% last year

Big Picture: A Tata IPO should be exiting but current grey market data suggests a meh ~2% listing pop. So why are markets feeling blah? Well, for starters, Tata Capital kinda sits in the middle of the pack. Smaller than leader Bajaj Finance but not small enough to have carved out a really unique space for itself. Its net interest margins -- a key profitability indicator -- are also on the lower side (~5% vs ~8% levels of a Shriram Finance). Valuations are also a tad expensive.

But finally, there’s a question of why Tata is listing this firm in the first place. It doesn’t need the money; it’s been forced by the RBII which isn’t super encouraging. FWIW - most analysts say subscribe for the long-term. While Tata stocks have been a bit of a funk recently, they have a reliable track record of making their shareholders money.

Specials
3 Stocks On Traders’ Radar

Wondering what stocks the pros are watching right now? In our latest video, we reveal three stocks that SEBI RAs have recently added to their Stocktwits watchlist.