Stock market advice travels fast, and a lot of it is half-true. A friend says “big brand, safe bet.” A video says “lower price, bigger upside.” A group chat says “everyone is buying.” None of it comes with the context you need.
Lending stocks attract more of these shortcuts than most. So before you act on the Tata Capital share price or the Bajaj Finance share, here are six myths worth setting aside, along with what to do instead.
A quick background
Both companies are non-banking finance companies (NBFCs). They lend money, and their profit comes mainly from the gap between what it costs them to raise funds and what they earn on loans.
Tata Capital is the flagship financial services arm of the Tata Group and a subsidiary of Tata Sons. Its shares began trading on 13 October 2025 at ₹330, which means it is still a fairly young listed company. Bajaj Finance is part of the Bajaj Finserv group, is widely known for consumer and small business lending, and has been listed for many years. Keep that difference in mind, because it comes up in several of the myths below.
Myth 1: “A Tata name means it cannot go wrong”
A strong parent group is a real advantage. It can help with trust, access to funding, and credibility with customers. But a brand does not repay loans on behalf of borrowers.
Tata Capital still faces the same pressures as any lender: interest rate changes, borrowers who miss payments, and regulatory shifts. The stock price can fall even when the brand is respected.
Do this instead: Judge the business on its numbers. Look at loan quality, profit margins, and capital strength in each quarterly report, whatever the brand.
Myth 2: “The lower share price is the cheaper stock”
This one trips up a surprising number of beginners. The price of a single share depends on how many shares the company has issued, not on how valuable the business is. A company with a smaller price tag can be far more expensive than one with a larger price tag.
Do this instead: Compare ratios. The price-to-earnings ratio shows what you pay for each rupee of profit. The price-to-book ratio shows the price against net worth, which suits lenders well. Compare both with each company’s own history and with its peers.
Myth 3: “An established stock has nothing left to give”
Some investors assume that a long-listed company like Bajaj Finance has already had its run. Others assume that a new listing like Tata Capital must still have plenty of upside. Both are guesses dressed up as rules.
What matters is the price you pay relative to the earnings the company can deliver in future. An older company can keep growing, and a newer one can disappoint. A long track record mainly gives you more evidence to study, and a short one gives you less. Neither guarantees returns.
Do this instead: Ask what is already built into the price. If the valuation is high, the company needs to keep performing strongly just to justify it.
Myth 4: “A new listing is automatically risky, and an old one is automatically safe”
Risk is not decided by age alone. A newer listing has a shorter price history, so you cannot see how it behaved through several market cycles, and that is a genuine limitation. But a long-listed stock can still be risky if its loan book weakens or if its valuation runs ahead of its earnings.
Do this instead: Look at the risks specific to each company. For a lender, that means asset quality, the share of unsecured loans, funding costs, and how well it copes when the economy slows.
Myth 5: “Strong profit growth means the loan book is healthy”
Profit can rise for a while even when trouble is building underneath. A lender that grows loans very quickly may look great today and then face higher bad loans later, once borrowers start struggling.
Do this instead: Always read profit growth alongside the following:
- Gross and net NPA: the share of loans that are not being repaid.
- Provisions: money set aside to cover expected losses.
- Net interest margin: the spread between lending and borrowing costs.
- Capital adequacy: whether there is enough buffer to keep growing safely.
A healthy lender shows good growth and clean assets at the same time.
Myth 6: “I must pick one winner”
Investors often frame this as a contest, as if only one of the two stocks can deserve a place in a portfolio. In reality, the better question is how much of your money should sit in lending stocks at all.
Banks and NBFCs tend to move in the same direction when interest rates or regulations change. Owning two lenders does not give you the same spread of risk as owning two unrelated businesses.
Do this instead: Check your overall portfolio first. If financial stocks already take up a big share, adding more may raise your risk rather than lower it. If you have room, decide how much you are comfortable allocating to each, and stick to the plan.
A simple checklist before you act
- Read the most recent quarterly results for both companies.
- Check gross and net NPA, and see whether they are rising or falling.
- Compare valuation ratios with past levels and with similar lenders.
- Look at the mix of secured and unsecured lending.
- Decide how much of your portfolio each stock could reasonably represent.
- Use fresh data from a reliable source, because prices change every trading day.
Side by side
| Tata Capital | Bajaj Finance | |
|---|---|---|
| Parent group | Tata Group | Bajaj Finserv group |
| Listed since | October 2025 | Many years |
| Known for | Diversified lending, strong retail and vehicle finance | Consumer finance, SME loans, wide product range |
| What you can study | Recent results and strategy | A long performance record |
| What to watch | Short listed history | Expectations already reflected in the price |
Final thoughts
Good investing mostly comes down to replacing shortcuts with questions. Instead of asking “Which share is cheaper?” or “Which brand is safer?”, ask what the company earns from, how healthy its loans are, and what you are paying for that quality.
The Tata Capital share price and the Bajaj Finance share will keep moving every day. Your job is not to guess the next move. It is to understand the businesses well enough to hold them calmly, or to walk away if the numbers do not convince you.
Disclaimer: This article is for educational purposes only and is not investment advice. Investments in the securities market are subject to market risks. Please read all related documents carefully and consult a SEBI-registered advisor before investing.
