HDB Financial Services Limited, a retail-focused non-banking financial company (NBFC) and subsidiary of HDFC Bank, is preparing to launch its highly awaited Initial Public Offering (IPO) worth ₹12,500 crore.

This IPO will be a Book Building Issue and consists of:

• A fresh issue of ₹2,500 crore

• An offer for sale (OFS) by promoter HDFC Bank worth ₹10,000 crore

IPO opening and closing dates, as well as the price band, listing date, and lot size, are yet to be announced.

IPO Structure and Reservation Details

• Face Value: ₹10 per share

• Listing at: BSE and NSE

• Pre-Issue Shareholding: 94.36% held by HDFC Bank

• Post-Issue Shareholding: To be updated after final equity dilution

IPO Reservation (as per SEBI norms):

• Qualified Institutional Buyers (QIBs): Not more than 50%

• Retail Individual Investors (RIIs): Not less than 35%

• Non-Institutional Investors (NIIs or HNIs): Not less than 15%

Lead Managers and Registrar

The IPO is managed by a strong syndicate of 13 Book Running Lead Managers (BRLMs):

• JM Financial Limited

• BNP Paribas

• BofA Securities India Limited

• Goldman Sachs (India) Securities Pvt Ltd

• HSBC Securities & Capital Markets Pvt Ltd

• IIFL Capital Services Limited

• Jefferies India Pvt Ltd

• Morgan Stanley India Company Pvt Ltd

• Motilal Oswal Investment Advisors Ltd

• Nomura Financial Advisory and Securities (India) Pvt Ltd

• Nuvama Wealth Management Limited

• UBS Securities India Pvt Ltd

Registrar to the issue: MUFG Intime India Pvt Ltd (Link Intime)

Company Overview

HDB Financial Services, incorporated in 2007, is a diversified NBFC with a retail-first approach. Its core business lines include:

1. Enterprise Lending

2. Asset Finance

3. Consumer Loans

Apart from lending, the company also offers:

• Business Process Outsourcing (BPO) support to HDFC Bank

• Distribution of insurance products to lending customers

HDB operates with a “phygital” omni-channel model, combining a large branch presence and digital capabilities.

As of September 30, 2024:

• 1,772 branches in 1,162 towns across 31 states and UTs

• Over 80% branches are outside India’s top 20 cities

• Network includes 140,000+ retailers and dealer touchpoints

• Partnerships with 80+ brands and OEMs

Financial Performance

The company has posted strong financial growth in FY24 and H1 FY25, backed by a consistent increase in AUM and branch-level expansion.

• Reserves & Surplus (Sep 2024): ₹14,085.37 crore

• Total Borrowings (Sep 2024): ₹82,681.10 crore

Key Performance Indicators (KPIs)

The Return on Equity (ROE) is strong at 19.55%, indicating healthy profitability. However, the high leverage at a debt-equity ratio of 5.81x suggests the company is capital intensive.

Promoter & Shareholding

• Promoter: HDFC Bank Limited

• Pre-Issue Holding: 94.36%

• Post-Issue Holding: Will be calculated after equity dilution

HDFC Bank is expected to dilute a significant portion of its stake through the ₹10,000 crore OFS.

Market Outlook and Investment Perspective

HDB’s IPO is one of the largest NBFC listings in recent years. With a wide branch footprint, consistent profits, and strong brand parentage, HDB appears well-positioned to benefit from India’s growing retail credit demand.

However, key IPO factors to monitor include:

• Final valuation and pricing

• Macro credit cycle outlook

• Asset quality disclosures

• Impact of regulatory changes on NBFC

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  Disclaimer

  This article is for educational and informational purposes only and does not constitute financial advice. Investment decisions should be based on individual risk tolerance and consultation with SEBI-registered advisors. Market conditions are volatile and subject to change. Neither the author nor the platform is responsible for losses arising from use of this information

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  The Current active IPO are Jainik Power Cables, Monolithisch India.

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