HDB Financial Services, a subsidiary of HDFC Bank, is gearing up for its Initial Public Offering (IPO) to raise ₹12,500 crore. The IPO has received approval from the Securities and Exchange Board of India (SEBI), paving the way for what could be one of the largest NBFC listings in India. While the opening date, price, and lot size are yet to be officially announced, here's a breakdown of what we know so far.
Issue Details:
The HDB Financial Services IPO will consist of a fresh issue of shares worth ₹2,500 crore and an offer for sale (OFS) of ₹10,000 crore by its parent company, HDFC Bank. HDFC Bank, which currently holds a 94.36% stake in HDB Financial Services, will dilute a portion of its stake through the OFS. The face value of the equity shares is ₹10 each.
Objectives of the Issue:
The primary objective of the fresh issue is to augment the company's Tier-I capital base. This capital injection is crucial for HDB Financial Services to support its future growth, including expanding its lending activities and increasing its asset base. The OFS, on the other hand, allows HDFC Bank to realize some of the value of its investment in HDB Financial Services.
Tentative Timeline and Details:
While the exact dates for the IPO are yet to be announced, here's what is known. The IPO is expected to open sometime in 2025, with the allotment likely to be finalized shortly thereafter. The IPO is proposed to be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The price band and the lot size, which determines the minimum number of shares an investor can apply for, are still under consideration and will be announced closer to the IPO launch date.
Company Overview:
HDB Financial Services is a retail-focused Non-Banking Financial Company (NBFC) in India, classified as an Upper Layer NBFC by the RBI. As of September 30, 2024, the company has a pan-India network of 1,772 branches in 1,162 towns across 31 States and Union Territories, with over 80% of the branches located outside the 20 largest cities in India. The company serves 17.5 million customers.
HDB Financial Services offers a wide range of financial services, including:
Financial Performance:
HDB Financial Services has demonstrated consistent financial growth. The company reported revenue of ₹14,171.12 crore in 2024 against ₹12,402.88 crore in 2023. The company reported a profit of ₹2,460.84 crores in 2024 against a profit of ₹1,959.35 crores in 2023.
Book Running Lead Managers and Registrar:
Several prominent financial institutions are involved in managing the HDB Financial Services IPO. JM Financial Limited, BNP Paribas, BofA Securities India Limited, Goldman Sachs (India) Securities Private Limited, HSBC Securities & Capital Markets Pvt Ltd, IIFL Capital Services Limited, Jefferies India Private Limited, Morgan Stanley India Company Pvt Ltd, Motilal Oswal Investment Advisors Limited, Nomura Financial Advisory And Securities (India) Pvt Ltd, Nuvama Wealth Management Limited, and UBS Securities India Private Limited are the book-running lead managers. MUFG Intime India Private Limited is the registrar for the issue.
Reservation Details:
The IPO will have reservations for different investor categories:
Regulatory Compliance:
The proposed listing would also help HDB Financial Services meet a regulatory norm that mandated certain large non-bank financiers to go public. The Reserve Bank of India (RBI) in its 2021 guidelines said that upper-layer NBFCs must be listed within three years of being identified as one.
How to Apply:
Once the IPO opens, you can apply online using either UPI or ASBA as a payment method. ASBA IPO application is available through the net banking of your bank account. UPI IPO application is offered by brokers who don't offer banking services.
As the IPO details are finalized, it is advisable to keep an eye on official announcements for the opening date, price band, and lot size to make informed investment decisions.
