The highly awaited IPO of HDB Financial Services, a prominent NBFC backed by HDFC Bank, opened for subscription on Wednesday, June 25, 2025, targeting a massive ₹12,500 crore. With a price band of ₹700–₹740 per share, this is one of India’s largest IPOs of the year, coming at a time of strong investor appetite for high-quality financial sector offerings.
The IPO comprises a fresh issue of ₹2,500 crore and an offer for sale (OFS) of ₹10,000 crore by HDFC Bank, which currently holds 95.5% stake in the company. Investors are keenly watching this issue, given the company’s robust financials, nationwide presence, and improving profitability.
📚 Table of Contents
- 📌 IPO Snapshot: Key Offer Details
- 🏢 Company Overview: What is HDB Financial Services?
- 📈 Financial Highlights: Strong Growth Trajectory
- 💹 Grey Market Premium (GMP): Market Signals Are Positive
- 📊 Valuation: Is the IPO Fairly Priced?
- 🔍 Analyst Recommendations: Market Experts Say ‘Subscribe’
- ⚠️ Risk Factors to Consider
- 📌 Use of Proceeds and Strategic Impact
- 🙋♂️ Frequently Asked Questions (FAQ) – HDB Financial Services IPO
Let’s explore whether the HDB Financial Services IPO deserves a place in your portfolio.
📌 IPO Snapshot: Key Offer Details
- IPO Size: ₹12,500 crore
- Type: Fresh Issue + Offer for Sale
- Fresh Issue: ₹2,500 crore
- OFS by HDFC Bank: ₹10,000 crore
- Price Band: ₹700 – ₹740 per share
- Lot Size: 20 shares (tentative)
- Issue Opens: June 25, 2025
- Issue Closes: June 27, 2025
- GMP (Grey Market Premium): ₹74 (Approx. 10%)
- Listing Date: First week of July 2025
- Exchanges: BSE & NSE
The proceeds from the fresh issue will be used to strengthen the capital base and support future lending activities, while the OFS proceeds will go to HDFC Bank, bringing its stake in line with regulatory norms.
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🏢 Company Overview: What is HDB Financial Services?
Founded in 2007, HDB Financial Services Ltd. is one of India’s leading non-banking financial companies, providing a wide range of secured and unsecured loan products to individuals and small businesses. Its diversified lending portfolio includes:
- Personal Loans
- SME Loans
- Loan Against Property (LAP)
- Gold Loans
- Consumer Durable Loans
- Commercial Vehicle Loans
As of March 31, 2025, the company boasts:
- Loan Book: ₹1.06 lakh crore
- Branch Network: 1,700+ branches
- Cities Covered: 1,200+
- Customer Base: Over 1.9 crore customers
The company’s reach into Tier II and Tier III cities positions it uniquely to capitalize on India’s credit expansion in semi-urban and rural areas.
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📈 Financial Highlights: Strong Growth Trajectory
HDB Financial’s performance has been on a steep upward curve, both in terms of earnings and asset quality.
Key Financial Metrics (FY25)
- Revenue: Estimated to cross ₹18,000 crore
- Net Profit: ₹2,176 crore (vs ₹1,359 crore in FY24)
- Gross NPA (GNPA): 2.49%
- Net NPA: 1.38%
- Return on Equity (ROE): \~16.5%
- Capital Adequacy Ratio: 20.2%
The reduction in NPA levels and sharp increase in profit indicate strong underwriting standards and effective risk management. Its asset quality is well-maintained, especially for a retail-focused NBFC.
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💹 Grey Market Premium (GMP): Market Signals Are Positive
The GMP for HDB Financial’s IPO is around ₹74, indicating a 10% premium over the upper price band. This reflects bullish investor sentiment and suggests that listing gains are likely.
However, while GMP gives insight into demand, investors should base their decisions on fundamentals rather than speculative sentiment.
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📊 Valuation: Is the IPO Fairly Priced?
At the upper band of ₹740 per share, HDB Financial is valued at 3.7x its FY25 estimated book value, which analysts consider fair for a well-capitalized, consistently profitable NBFC with a wide reach and strong parentage.
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🔍 Analyst Recommendations: Market Experts Say ‘Subscribe’
Leading brokerage houses have given positive ratings to the IPO:
- SBI Securities: “Strong brand, low leverage, and growth visibility make this IPO attractive.”
- Ventura Securities: “The IPO is fairly priced considering the improving profitability, robust asset quality, and capital adequacy.”
- Anand Rathi: “An opportunity to invest in a high-quality, retail-focused NBFC with long-term earnings visibility.”
These endorsements reflect broad consensus among institutional investors regarding the growth potential and stability of HDB Financial.
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⚠️ Risk Factors to Consider
Despite the strong fundamentals, it’s important to weigh the potential risks:
- Macroeconomic Exposure: Being retail-focused, the company is vulnerable to economic slowdowns and changes in consumer credit behavior.
- Competition: The NBFC space is crowded, with aggressive digital players entering the market.
- Regulatory Overhang: RBI norms on provisioning and capital adequacy can impact future margins.
- Parent Stake Dilution: Though aligned with norms, HDFC Bank’s reduced stake post-IPO may impact synergies over time.
Still, these risks are well-managed through diversification and robust governance practices.
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📌 Use of Proceeds and Strategic Impact
- Fresh Issue Proceeds: To enhance capital base and support loan growth
- OFS Proceeds: Will go to HDFC Bank
- Post-IPO Impact: HDFC Bank’s shareholding to reduce, aligning with RBI’s regulatory requirements
This fundraising will strengthen HDB’s balance sheet, enabling it to expand its lending footprint without raising debt — a key positive.
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