Synopsis : HDB Financial Services, a key HDFC Bank subsidiary, is set to launch a ₹12,500 crore IPO—marking the first public offering under the HDFC Bank umbrella post-merger. Backed by robust growth, a wide reach, and SEBI’s approval, the listing is highly anticipated by retail and institutional investors alike.
All You Need to Know About HDB Financial’s ₹12,500 Crore IPO
In a major move within India’s financial sector, HDB Financial Services, a subsidiary of HDFC Bank, has received SEBI approval to launch its much-awaited ₹12,500 crore IPO. This issue includes a fresh issue of ₹2,500 crore and an Offer for Sale (OFS) of ₹10,000 crore by the promoter, HDFC Bank.
This IPO marks a significant milestone—not just for HDB Financial, but for the entire HDFC group, being the first public issue since HDFC AMC’s listing in 2018, and the first post the HDFC-HDFC Bank merger.
What Is HDB Financial Services?
Founded in 2007, HDB Financial is a non-deposit taking NBFC classified as an NBFC-Upper Layer (NBFC-UL) by the Reserve Bank of India. With its own independent board, management, and governance structures, HDB focuses on lending across urban and semi-urban areas, operating over 1,772 branches across 1,162 towns and cities.
Business Streams at a Glance
HDB’s lending business is divided into three major verticals:
Enterprise Lending: Offers working capital loans, equipment loans, and term funding for MSMEs and professionals.
Asset Finance: Funds purchase of commercial vehicles, tractors, and equipment for transporters and contractors.
Consumer Finance: Short-term loans for appliances, two-wheelers, phones, etc.
The company also provides business process outsourcing (BPO) services.
Financial Snapshot
Gross Loan Book: ₹98,620 crore as of Sept 2024
Net Profit (FY24): ₹2,460.8 crore (up from ₹1,620 crore in FY22)
Assets Under Management (AUM): ₹90,230 crore
ROA: 3.03%
ROE: 19.55%
Net Interest Margin (NIM): >7%
Gross NPA / Net NPA: 1.90% / 0.63%
Provision Coverage Ratio (PCR): 61%
These figures underline HDB's financial stability, strong growth, and disciplined risk management.
IPO Objective
Fresh Issue (₹2,500 Cr): To strengthen Tier-I capital base for future expansion and support lending activities.
Offer for Sale (₹10,000 Cr): Promoter HDFC Bank to partially dilute its 94.6% stake to comply with SEBI’s public shareholding norms.
IPO-related Expenses: To be proportionally borne by the company and promoters.
Importantly, no proceeds will go directly to HDFC Bank or any related party.
Risk Factors Highlighted
Macroeconomic Sensitivity: A downturn could affect operations and asset quality.
Loan Portfolio Volatility: Past fluctuations in Stage 3 loans from 4.99% (Mar 2022) to 1.90% (Sept 2024).
Promoter Dependence: Strong HDFC Bank brand is vital, but conflicts of interest or logo license termination pose a risk.
Interest Rate Volatility: Could impact net interest income and margins.
What Sets This IPO Apart?
First IPO by HDFC Group Since 2018
First HDFC Bank-led listing post-merger
One of the largest NBFC IPOs in recent years
Strong Pan-India Presence with 80% of branches outside top 20 cities
Over 17.5 million active customers served
Disclaimer : This article is for informational purposes only and does not constitute financial advice. Readers are advised to consult with a certified financial advisor before investing in any IPO or stock market instrument.
