The HDB Financial Services IPO, a significant event in the Indian financial market, has garnered considerable attention from investors. The IPO, which aims to raise ₹12,500 crore, witnessed a subscription of 1.16 times on day two, and closed on June 27, 2025. This article delves into the subscription status, grey market premium (GMP), and provides insights to help investors decide whether to apply.

Subscription Status

The HDB Financial Services IPO has seen varied responses across different investor categories. Non-institutional investors (NIIs) showed strong interest, with their portion subscribed 2.29 times. Qualified institutional buyers (QIBs) followed with a subscription of 90%. However, the retail individual investors (RIIs) portion was subscribed 64%. By the end of day 2, the IPO was subscribed 1.16 times overall, indicating a decent response from the primary market investors.

Grey Market Premium (GMP)

The grey market premium (GMP) serves as an indicator of investors' willingness to subscribe to an IPO. On June 27, 2025, the GMP for HDB Financial Services IPO was ₹50, a decrease from ₹75 the previous day. This fluctuation could be attributed to the volatility in the stock market and the tepid response from retail investors initially. However, a positive GMP suggests that the shares are expected to list at a premium over the IPO price.

Financial Details and Objectives

The HDB Financial Services IPO includes a fresh issue of equity shares worth ₹2,500 crore and an offer for sale (OFS) of ₹10,000 crore by its promoter, HDFC Bank. HDFC Bank currently holds a 94.36% stake in HDB Financial Services, a non-banking financial company (NBFC). The company intends to use the proceeds from the fresh issue to strengthen its Tier-I capital base, supporting future capital needs and business growth. The price band for the IPO has been fixed at ₹700-₹740 per share, valuing the company at nearly ₹61,400 crore at the upper end.

Market Sentiment and Expert Opinions

Market observers suggest that the dip in GMP should not deter investors, especially given the strong bull trend in the secondary market. KR Choksey Securities has given a "subscribe" rating to the IPO, noting that it is attractively priced compared to its peers, considering its parentage, peer group ROA average, and growth potential.

About HDB Financial Services

HDB Financial Services, established in 2007, is a diversified retail-focused NBFC in India. It offers a range of lending products, including enterprise lending, asset finance, and consumer finance. The company primarily serves salaried and self-employed individuals, business owners, and entrepreneurs, focusing on underserved and underbanked customers from low to middle-class families. As one of the largest customer franchises in India, HDB Financial Services caters to 17.5 million customers through a network of 1,772 branches across 1,162 towns in 31 states and union territories.

Final Thoughts

The HDB Financial Services IPO has received a mixed response, with strong interest from NIIs and QIBs but moderate participation from retail investors. The grey market premium, while fluctuating, remains positive, indicating potential listing gains. The company's strong parentage, diversified portfolio, and growth potential make it an attractive investment for the long term. However, investors should consider market volatility and their risk appetite before making a final decision.