HDB Financial Services IPO: Initial Offering from HDFC Bank’s Subsidiary
HDB Financial Services has launched its initial public offering (IPO), aiming to raise ₹12,500 crore, marking one of the largest public offerings in India this year. The IPO opened for subscription on Wednesday and comes at a time of increased interest in financial sector listings. With a loan portfolio of ₹1.06 lakh crore and a net profit of ₹2,176 crore for FY25, the company is well-positioned in the market, boasting strong asset quality metrics.
IPO Subscription Details
The subscription period for HDB Financial Services’ IPO will run until June 27. The company has set a price band between ₹700 and ₹740 per share. Currently, the grey market premium (GMP) stands at approximately ₹74, indicating a 10% premium over the issue price. The IPO consists of a fresh issue of ₹2,500 crore and an offer for sale (OFS) of ₹10,000 crore. At the upper limit of the price band, the valuation places HDB Financial at 3.7 times its projected FY25 book value. This valuation is considered justified due to the company’s operational history and its strong affiliation with HDFC Bank.
Leading financial institutions have shown a positive response to the offering. Analysts from SBI Securities, Ventura Securities, and Anand Rathi have recommended a ‘Subscribe’ rating, citing the company’s solid core metrics and asset quality. Ventura’s analysis highlights the improving profitability and robust risk management, while Anand Rathi emphasizes the opportunity to invest in a high-quality, retail-focused NBFC that benefits from HDFC Bank’s extensive reach and reputation.
Company Performance and Market Position
HDB Financial Services ranks among India’s leading non-banking financial companies (NBFCs), with a diverse loan portfolio that includes secured and unsecured personal loans, gold loans, and SME financing. As of March 31, 2025, the company reported a net profit of ₹2,176 crore, a significant increase from ₹1,359 crore in the previous fiscal year. The company’s asset quality remains strong, with a gross non-performing asset (GNPA) ratio of 2.49% and a net non-performing asset (NPA) ratio of 1.38%. This performance reflects the company’s effective risk management strategies and commitment to maintaining high asset quality.
HDB Financial operates a vast network across India, with 1,700 branches in 1,200 cities and towns, serving over 1.9 crore customers. This extensive reach allows the company to cater to a diverse clientele and meet the growing demand for financial services in the retail sector. The company’s strong operational metrics and growth potential position it favorably in the competitive landscape of the financial services industry.
Future Prospects and Trading Schedule
The proceeds from the fresh issue are expected to bolster HDB Financial’s capital base, enabling the company to support future credit operations. The offer for sale proceeds will be directed to HDFC Bank, which will see its ownership stake decrease post-IPO to comply with regulatory requirements. The shares are anticipated to begin trading on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) in the first week of July.
Investment firms have expressed confidence in HDB Financial’s growth trajectory, citing its diversified lending portfolio, strong parentage, and solid asset quality. Geojit Investments has also recommended a “Subscribe” rating, noting that at the upper price band of ₹740, HDB is available at a price-to-book (P/B) ratio of 3.4x, which appears fairly priced compared to its peers. The company’s robust growth prospects and commitment to maintaining high asset quality make it an attractive investment opportunity for long-term investors.
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