Kotak Sees 11% Upside for Tata Capital Despite Shares Below IPO Price

• Kotak Institutional Equities initiated coverage on Tata Capital with an 'Add' rating and a ₹360 price target, implying an 11% upside.
• Tata Capital is India's third-largest NBFC, with a ₹2.44 lakh crore loan book as of Q2 FY26.
• Kotak projects a 21% CAGR in gross loans (FY25-FY28), driven by retail lending (61% of book) and an expanding physical footprint.
• The merger of Tata Motors Finance Ltd. and improving leverage are expected to drive a 29% CAGR in EPS (FY25-FY28) and raise ROE to 15.7% by FY28.
• Tata Capital shares are currently trading below their IPO price of ₹326.

Why It Matters: It highlights Tata Capital's growth potential and investment opportunity.