Tata Capital IPO Frenzy Shifts Liquidity, Squeezing Secondary Markets

As of October 6, 2025, India's IPO calendar is gearing up for a busy week, with two major offerings expected to raise over ₹27,000 crore. The first is Tata Capital's massive ₹15,511 crore issue, while the other is LG Electronics India's ₹11,607 crore offer-for-sale (OFS).

This influx of capital into the primary market is expected to have a significant impact on the secondary markets, where listed stocks are traded. Experts warn of a potential "pinch" on the secondary markets, as the diversion of funds into these large IPOs could lead to less liquidity available to push up existing stocks, especially in the midcap and smallcap segments.

The Tata Capital IPO's grey market premium (GMP) has been closely watched, as it provides an informal indicator of market expectations for the stock's listing performance. While the GMP hints at a potential listing bump, it is not a guarantee, and investors are advised to be selective and not get caught up in the hype.

Analysts suggest that this IPO-driven liquidity shift could lead to a rotation in the market, with some sectors potentially bucking the overall trend. Corrections in banking or IT, for instance, could open up opportunities, while themes like consumer electronics or discretionary might benefit from festival tailwinds or GST stimuli.

The message is clear: this is a time for caution and strategic investing. Investors should avoid chasing every IPO and instead focus on the fundamentals of the businesses. The Tata Capital IPO GMP is just one piece of a larger puzzle, and the overall market dynamics, including cash flows, sentiment, and news triggers, will be crucial in navigating the volatility expected during this IPO-heavy week.