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Synopsis: HDB Financial Services, the non-banking finance arm of HDFC Bank, recently submitted a Draft Red Herring Prospectus (DRHP) for an initial public offering (IPO) totaling Rs 12,500 crore. This IPO includes a fresh issue worth Rs 2,500 crore and an Offer for Sale (OFS) worth Rs 10,000 crore, in line with RBI’s recent regulations for large non-bank financial companies. This IPO will support HDB Financial's expansion and address capital requirements, aligning with regulatory mandates and marking the group's first major public offering in six years.
HDB Financial Services, a subsidiary of HDFC Bank, has formally initiated its IPO process, filing a Draft Red Herring Prospectus (DRHP) on October 30, 2024, with the Securities and Exchange Board of India (SEBI) and both the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). The proposed IPO, one of the largest by a non-banking finance company (NBFC) in India, includes a fresh issue of equity shares worth Rs 2,500 crore and an Offer for Sale of Rs 10,000 crore by current shareholders. This IPO not only aims to support HDB Financial’s capital needs but also aligns with RBI regulations mandating NBFCs classified as “upper-layer” entities to go public by September 2025.
The parent company, HDFC Bank, which holds a 94.6% stake in HDB Financial, approved this offering in September 2024. By meeting capital requirements and enhancing market visibility, the IPO seeks to further HDB Financial’s growth in the lending sector. Established in 2007, HDB Financial now operates across 1,680 branches nationwide, providing a range of secured and unsecured loans.
Jefferies, Goldman Sachs, and BofA Securities are among the book-running lead managers for this offering. Market conditions and regulatory approvals will ultimately determine the IPO timeline and size. The Indian IPO market has seen substantial activity this year, with companies raising approximately $12.57 billion so far, more than 2023’s $7.42 billion.
Disclaimer: This article is for informational purposes only and not financial advice. Please consult a licensed advisor before making investment decisions.
