HDB Financial Services, one of the leading diversified retail-focused NBFCs in India, is set to launch its initial public offering (IPO) on June 25, 2025, aiming to raise ₹12,500 crores. The issue consists of a fresh issue of 337.83 lakh shares aggregating to ₹2,500 crores, and an offer for sale (OFS) of 1,351.35 lakh shares totalling ₹10,000 crores.

The IPO price band is fixed at ₹700 to ₹740 per equity share. At the upper band of ₹740, HDB Financial Services’ market capitalisation will stand at ₹61,387.93 crores. The lot size is 20 shares, requiring retail investors to apply with a minimum of ₹14,800, while HNIs must invest in at least 14 lots (280 shares) or ₹2,07,200.

The IPO closes on June 27, 2025, and the allotment is expected by June 30, 2025. The shares will be listed on BSE and NSE, tentatively on July 2, 2025.

Despite strong fundamentals, the Grey Market Premium (GMP) is reported at ₹0, indicating no expected listing gains. GMP often reflects unofficial demand but is not a reliable price indicator.

About HDB Financial Services

HDB Financial Services is an Upper Layer NBFC (NBFC-UL) under RBI classification. It operates across various lending segments, including Enterprise Lending, Consumer Finance, and Asset Finance, servicing customers via an extensive omni-channel distribution network.

It is promoted by HDFC Bank Limited, a name synonymous with trust and scale in India’s financial sector.

Financial Performance

The company has shown consistent growth in financials:

• Revenue from operations:

  • FY23: ₹124,028.80 million

  • FY24: ₹141,711.20 million

  • FY25: ₹163,002.80 million

• EBITDA:

  • FY23: ₹62,511.60 million

  • FY24: ₹83,141.30 million

  • FY25: ₹95,123.70 million

• Profit After Tax (PAT):

  • FY23: ₹19,593.50 million

  • FY24: ₹24,608.04 million

  • FY25: ₹21,759.20 million

Although FY25 saw a decline in PAT, EBITDA and revenues improved.

Valuation Metrics

• Pre-issue EPS (FY24): ₹27.32

• Post-issue EPS (FY24): ₹26.23

• Pre-issue P/E: 27.08x

• Post-issue P/E: 28.21x

• Industry P/E: 23x

• ROAE (FY24): 14.72%

• RoNW (FY24): 14.72%

This indicates that the IPO is fully priced or slightly overvalued relative to industry standards.

IPO Objectives

The net proceeds from the fresh issue will be used for:

1. Augmentation of Tier-I Capital base to support future lending in Enterprise, Asset and Consumer Finance verticals.

IPO Review and Recommendation

Given the zero Grey Market Premium (GMP) and the fact that the IPO is fully priced with post-issue P/E higher than industry average, experts suggest "Avoid for listing gains". However, long-term investors may consider it based on brand strength, operational performance, and promoter reputation (HDFC Bank).

How to Check Allotment Status

To check the IPO allotment status on or after June 30, 2025:

• Visit the registrar website (MUFG Intime India Pvt Ltd)

• Select "HDB Financial Services IPO"

• Enter your PAN, DP ID, or Application Number

Conclusion

HDB Financial Services IPO is one of the largest public offerings of 2025 in the NBFC segment. Despite a strong business model, wide distribution network, and robust past performance, the current valuation leaves little upside for short-term listing gains.

Retail investors should assess their risk appetite and consider professional advice before investing. With HDFC Bank as the promoter, long-term growth prospects are strong, but entry at a more attractive valuation may be prudent.

Disclaimer: This article is for informational purposes only. Investors are advised to consult financial professionals and read all relevant documents before making investment decisions.

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