HDB Financial Services Secures Rs 3,369 Crore in IPO Funding
HDB Financial Services, a subsidiary of HDFC Bank, has successfully raised ₹3,369 crore from 141 anchor investors in anticipation of its upcoming ₹12,500-crore initial public offering (IPO). The company allocated over 4.55 crore equity shares at ₹740 each, the maximum price in the range set for the IPO. Notable investors include major domestic mutual funds, insurance firms, and international institutions, highlighting strong interest in the offering.
Investor Participation and Allocation
The anchor investment round saw significant participation from a diverse group of investors. Among the key players are LIC, ICICI Prudential Mutual Fund, SBI Mutual Fund, Nippon India Mutual Fund, and global giants like BlackRock and Morgan Stanley. The allocation of shares was substantial, with nearly 1.94 crore shares distributed to 22 domestic mutual funds through 65 different schemes. This broad base of investment reflects confidence in HDB Financial Services’ growth potential and market strategy.
The IPO is set to open for public subscription on June 25 and will close on June 27. It comprises a fresh issue of ₹2,500 crore and an offer-for-sale (OFS) of ₹10,000 crore by HDFC Bank, which currently holds a 94.36% stake in the non-banking financial company (NBFC). Following the IPO, HDB Financial Services will continue to operate as a subsidiary of HDFC Bank.
Valuation and Market Position
At the upper end of the price band, HDB Financial Services is valued at approximately ₹61,400 crore. The company’s shares are expected to be listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on July 2. HDB Financial Services has established itself as a significant player in the financial services sector, managing assets exceeding ₹1 lakh crore and serving over 17.5 million customers as of September 2024.
The company boasts a diversified product portfolio and operates a comprehensive distribution network across India, with 1,772 branches. This extensive reach allows HDB to cater to various segments, including enterprise, consumer, and asset finance, positioning it well for future growth.
Future Growth and Regulatory Compliance
The proceeds from the fresh issue will be directed towards strengthening HDB Financial Services’ Tier-I capital base, which is essential for supporting its growth and lending requirements. This IPO aligns with the Reserve Bank of India’s directive from October 2022, which mandates that NBFCs classified in the ‘upper layer’ category must list within three years.
Ramesh G, the Managing Director and CEO of HDB Financial Services, emphasized the company’s independent operations since its inception in 2008. He noted that the company has developed its lending business without relying on the parent bank for sourcing or technology. This independence is crucial as HDB Financial Services aims to enhance its market presence and continue its trajectory of growth in the competitive financial landscape.
Upcoming IPO Landscape
The IPO of HDB Financial Services is notable as it is the second-largest in the past three years, following Hyundai’s ₹27,000-crore issue. The offering is being managed by a consortium of 12 book-running lead managers, including JM Financial, Goldman Sachs India, HSBC, and Nomura, among others. Other significant IPOs expected in the near future include those from Tata Capital, LG, PhonePe, and Lenskart, indicating a vibrant market for public offerings in India.
Observer Voice is the one stop site for National, International news, Sports, Editor’s Choice, Art/culture contents, Quotes and much more. We also cover historical contents. Historical contents includes World History, Indian History, and what happened today. The website also covers Entertainment across the India and World.
