Tata Capital Ltd saw its shares falling 4 per cent in Monday's trade amid healthy turnover. The stock fell 4.18 per cent to hit a low of Rs 356 on BSE, trimming gains after a two-day 9 per cent rally. The selling on the Tata group counter was seen following a 6.18 per cent rally on Friday and 2.48 per cent jump on Thursday. The company board recently approved raising of funds up to an amount of Rs 36,000 crore, on a private placement basis, in one or more tranches, subject to the approval of shareholders.

Tata Capital shares have time-corrected since its IPO, JM Financial said. It said visible levers like high yield book expansion, improving profitability trajectory in motor finance and maintaining of high growth reinforced its confidence in Tata Capital. 

"We maintain our EPS estimates but increase our target to Rs 400 (from Rs 380) due to rollover, valuing it at 2.8 times FY28E BVPS (versus 2.7 times earlier). Consequently, we upgrade the stock to Buy from Add," JM said last week.

Nomura, which met the Tata Capital management, said liquidity was not a challenge but cost of funds remained elevated during June quarter, which is contrary to the usual trend of a drop seen June versus March. The management has passed on the higher costs of funds in select segments to manage this stress, it said last week.

Nomura said there is no major concern around asset quality trends, with bounce rates improving in June 2026 against April 2026, which was already an improvement over the spike of March 2026. Even then, the management has been cautious and has thus tightened underwriting in commercial vehicles, commercial equipment and select SME segments, it said.

The foreign brokerage suggested 'Buy' and a target of Rs 400 on the stock.