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HDB FINANCIAL SERVICES LTD IPO

IPO Details

ICICI Direct Research Rating : FOR LONG TERM
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20 Shares
₹ 14,800
₹ 700 – 740
₹ Up to 12500 Cr

Issue timeline

  • -
  • 30-Jun-2025
  • 01-Jul-2025
  • 01-Jul-2025
  • 02-Jul-2025

Subscription Status

Shareholder -
Qualified Institutional Buyers -
Non-Institutional Investor -
Retail Individual Investor -
Employee -
Total -

About Company

HDB Financial Services IPO: India’s Mega NBFC Hits the Market

HDB Financial Services Limited, the non-banking finance company (NBFC) backed by HDFC Bank, is set to launch what could be the largest IPO from an NBFC in India—an estimated ₹12,500 crore issue. This monumental event will not only mark a major step for the HDFC Group but also reflect renewed investor interest in India's financial markets.

 

What is HDB Financial Services?

Founded in 2007, HDB Financial has grown into a leading retail-focused NBFC, offering a range of loans—secured and unsecured—across enterprise, asset, and consumer finance. With over 1,772 branches in more than 1,160 towns, the company caters to more than 17.5 million customers, especially in underbanked and semi customer base segments.

HDB is known for:

  • A diverse loan book: enterprise lending, asset financing, and consumer lending
  • A strong digital push with AI/ML-enabled credit systems and streamlined service delivery
  • AAA credit ratings from CRISIL and CARE, reflecting a healthy balance sheet

 

IPO Details at a Glance

  • Total Issue Size: ₹12,500 crore
    • Fresh Issuance: ₹2,500 crore
    • Offer for Sale (OFS): ₹10,000 crore
  • Price Band: ₹700 to ₹740 per share
  • Face Value: ₹10 per share
  • IPO Open Date: June 25, 2025 
  • IPO Close Date: June 27, 2025
  • IPO Listing Date: July 2, 2025
  • Listing At: BSE & NSE

 

Why This IPO Matters

  1. Compliance with RBI Rules
    Greater regulation has pushed "upper-layer" NBFCs like HDB to list publicly by September 2025.
  2. Biggest NBFC Offering
    This IPO will be the largest from an NBFC, signalling investor confidence and robust demand in financial services.
  3. HDFC Bank’s Strategic Move
    The OFS allows HDFC Bank to reduce its stake by about 10% while still maintaining control, in compliance with regulatory norms.
  4. Market Resurgence
    A wave of IPOs—including NSDL and Vikram Solar—has revived primary markets in mid‑2025.

 


 

Key Financial Highlights

  • Revenue Growth: HDB’s total income grew steadily, crossing ₹14,000 crore in FY24—a 25% increase from FY23.
  • Strong Profitability: Profit after tax nearly doubled between FY22 and FY24, rising from ₹1,011 crore to ₹2,461 crore.
  • Asset Base Expansion: Total assets increased significantly, showing a compound annual growth as the company scaled its lending book.
  • Healthy Net Worth: The company’s net worth rose to ₹13,742.71 crore in FY24, strengthening its financial stability.
  • Reserves Growth: Retained earnings have consistently grown, indicating profitability and internal capital generation.
  • Moderate Leverage: Borrowings increased to support growth, but remain proportionate to the expanding asset base.
 
Strengths of HDB Financial Services:
 
  • Backed by HDFC Bank – Gains access to deep distribution, branding, and oversight
  • Diverse Loan Products – Offers enterprise, asset, and consumer finance for a wide customer base
  • Digital-Ready – Advanced AI-powered onboarding and Credit-tech infrastructure
  • Strong Asset Quality – Maintains low GNPA (2.1%) and NNPA (0.83%)
  • Scale & Reach – Over 1,700 branches and 1.4 lakh+ retail partnerships
  • Credit Strength – AAA rating with low borrowing cost (~7.5%)
 

Risks to Consider

  • High Leverage – Debt/equity ratio around 6x could expose it to rate hikes or liquidity shifts
  • Interest Margin Pressure – NIM declined (from 8.25% to ~7.85%)
  • Economic Sensitivity – NBFCs are vulnerable to downturns, impacting collections and growth
  • Valuation Concerns – Private market pricing may be high (5–6x P/B compared to peers)
  • Parent Oversight – HDFC Bank remains the dominant stakeholder, which could limit minority influence
 

Should You Invest?

If you seek a long-term bet on India’s financial technology and lending growth, HDB Financial has compelling credentials:

  • Scale, high RoE, diversified portfolio, and digital edge speak for sustained performance.
  • Strategic link with HDFC Bank adds credibility and reach.

But be mindful of:

  • High valuation multiples
  • Leverage and market-sensitivity risks
  • Execution in scaling responsibly

 

Final Take

The HDB Financial Services IPO is shaping up to be the largest NBFC offering in 2025 and a landmark event in India’s financial market. Combining scale, profitability, credit strength, and digital readiness, HDB Financial stands out as a robust market entrant.

Yet, the size, pricing, and leveraged model bring challenges. Investors should gauge whether HDB is being offered at a fair price and how its risk-return profile sits in their portfolio.

Strengths & Risks

Strengths (3)
  • Highly granular retail loan book, bolstered by a large and rapidly growing customer base

They are India’s second largest and third fastest growing customer franchise amongst NBFC peers (for which data is available), according to the CRISIL Report, and they have served 19.2 million customers as at March 31, 2025, which grew at a CAGR of 25.45% between March 31, 2023 and March 31, 2025. The growth of their customer base is supported by the government’s policies aiming to promote financial inclusion for the middle-class

Risks (3)
  • May face asset-liability mismatches in the future, which may cause liquidity concerns

    They continue to cater to our liquidity needs and maintain adequate sources of funding for business growth through diversified 33 funding sources. They have adopted a policy of managing assets while monitoring future cash flows and liquidity on a daily basis. Mismatches in the maturity of assets and liabilities are a key financial and liquidity risk for them.

    • Highly granular retail loan book, bolstered by a large and rapidly growing customer base

    They are India’s second largest and third fastest growing customer franchise amongst NBFC peers (for which data is available), according to the CRISIL Report, and they have served 19.2 million customers as at March 31, 2025, which grew at a CAGR of 25.45% between March 31, 2023 and March 31, 2025. The growth of their customer base is supported by the government’s policies aiming to promote financial inclusion for the middle-class

    • Large, diversified and seasoned product portfolio with a sustainable track record

    They have built a balanced and diversified portfolio of lending products that seek to fulfil a wide range of needs and aspirations for their customers, including their underbanked customers. As at March 31, 2025, their product portfolio consisted of 13 lending products spanning across three business verticals of Enterprise Lending, Asset Finance and Consumer Finance
    • Tailored sourcing supported by an omni-channel and digitally powered pan-India distribution network

    Their phygital sourcing network is composed of our own internal distribution network, our external distribution network as well as our digital capabilities. We have a pan-India presence with no region accounting for more than 35% of our Total Gross Loans as at March 31, 2025
    • May face asset-liability mismatches in the future, which may cause liquidity concerns

      They continue to cater to our liquidity needs and maintain adequate sources of funding for business growth through diversified 33 funding sources. They have adopted a policy of managing assets while monitoring future cash flows and liquidity on a daily basis. Mismatches in the maturity of assets and liabilities are a key financial and liquidity risk for them.

    • Their Company, Promoter and Directors are involved in certain legal proceedings

    As on the date of the Red Herring Prospectus, the aggregate amount involved in litigation against the Company is ₹1,011.7 million (to the extent ascertainable and quantifiable), which is 0.68% of our net worth (₹149,365.0 million) as of March 31, 2025.

    • Parent Oversight – HDFC Bank remains the dominant stakeholder, which could limit minority influence

Financials

Total Income
Total Borrowings
Restated Profit after tax
Basic Earning Per Share

Industry Overview

NBFC credit to grow at 15-17% between FY 25 and FY 28 - Going forward, CRISIL Intelligence expects NBFC credit to grow at 15-17% between FY 25 and FY 28, driven by growth across retail, MSME and corporate segments continuing to be the primary drivers.Overall, consolidation in certain corporate groups and other corporate activities indicate buoyancy in the NBFC space and expectations of healthy credit growth

MSME, Housing and Auto Financing contributed approximately 51% to overall NBFC credit in FY 2025 - Retail and MSME segments are expected to experience higher growth in the upcoming fiscals. MSME credit accounted for 23% share as of FY 2025, witnessing a rise in its market share from 16% in FY 2019. Housing and auto segment constitute approximately 16% and approximately 11% share in overall NBFC credit as of FY 2025.

HDB Financial Services IPO FAQs

What is the minimum lot size and investment required for HDB Financial Services IPO?

The lot size for HDB Financial Services IPO is 20 shares and minimum investment required is Rs.14,800

HDB Financial Services IPO is mainboard IPO of issue size up to Rs.12,500 Cr which includes fresh issue of Rs. 2,500 Cr and offer for sale of size up to Rs. 10,000 Cr

HDB Financial Services IPO issue dates are from 25th – 27th June,2025.

The allotment date for HDB Financial Services IPO is 30th June,2025 and listing date is 02nd July.

The price band of HDB Financial Services IPO is Rs. 700 – Rs.740.

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₹ 14,800
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Non-Institutional Investor -
Retail Individual Investor -
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*The financials mentioned above are sourced from DRHP/ RHP documents.

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