HDB Financial Services IPO Gains Traction with 11% Premium Ahead of Launch

HDB Financial Services IPO Gains Traction with 11% Premium Ahead of Launch

HDB Financial’s ₹12,500 crore IPO is set to open June 25, with strong investor interest reflected in rising grey market premiums and robust fundamentals.

HDB Financial is preparing to unveil its long-anticipated initial share sale in the coming week.

HDB Financial Services, a subsidiary backed by HDFC Bank, is gearing up to launch its highly anticipated initial public offering (IPO) on Wednesday, June 25. With a planned issue size of ₹12,500 crore, it is positioned to become the largest IPO so far in 2025 and the biggest since Hyundai Motor India’s landmark ₹27,000 crore offering last year.

Bidding for the shares will be open through Friday, June 27, as the offering captures heightened interest fueled by HDB Financial’s market prominence and the substantial markup reflected in grey market activity.

Price Band, Lot Size, and Investment Details

The price range for the equity offering has been fixed between ₹700 and ₹740 per share. Interested buyers must apply for at least one lot—equivalent to 20 shares—and can apply in multiples thereafter. At the highest price point, the cost per lot totals ₹14,800.

Out of the total ₹12,500 crore issue size, ₹2,500 crore will be raised through the issuance of new shares, while the remaining ₹10,000 crore will come from an offer-for-sale involving 13.51 crore shares offloaded by the promoter, HDFC Bank.

Strong Interest in Grey Market Premium

Ahead of the IPO’s official opening, the grey market premium (GMP) for HDB Financial Services has climbed to ₹80 per share. This implies that the shares could potentially list at around ₹820, reflecting an approximate 11% premium over the upper price band.

Grey market premiums are often considered a gauge of investor sentiment prior to a stock’s market debut. While not always indicative of actual listing performance, the strong GMP points to solid retail and institutional demand.

A Milestone for the NBFC Sector

HDB Financial’s public offering represents a significant turning point for the country’s non-banking financial sector. Not only is it one of the largest IPOs from the sector, but it also underscores the growing confidence in well-capitalized, professionally managed lending institutions.

The company’s market capitalization post-listing is projected to be around ₹62,000 crore, positioning it as a major player in India’s financial services landscape.
Company leadership has described the IPO not as an exit strategy, but as a critical phase in its journey of value creation and long-term growth.

Regulatory Compliance Behind the Listing

The decision to go public also stems from regulatory compliance requirements. Back in October 2022, the Reserve Bank of India (RBI) placed HDB Financial in the “Upper Layer” tier among non-banking financial companies. This category mandates mandatory stock market listing to ensure enhanced transparency and governance standards.
By listing its shares, HDB Financial not only adheres to RBI guidelines but also opens the door to broader capital market participation in its business growth.

Wide-Reaching Business Operations

As of now, HDB Financial operates an extensive network of 1,680 branches across India. It boasts a well-diversified asset base, with a significant focus on retail lending and small to medium-sized enterprises (SMEs).

Key segments of its loan book include vehicle financing and loans secured against property. This diverse portfolio helps the company manage risk while tapping into growing credit demand from individuals and businesses alike.

Strong Financial Performance Backing the Issue

For the half-year period ending September 30, 2024, HDB Financial reported a net profit of ₹1,172.70 crore on a revenue base of ₹7,890.63 crore. Its full-year financials for FY24 showed further strength, with total revenue reaching ₹14,171.12 crore and net profits climbing to ₹2,460.84 crore.

These figures reflect consistent growth, operational efficiency, and prudent risk management, lending credibility to the IPO’s valuation and investment potential.

Attractive Value Proposition for Investors

Despite trading at a discount compared to some of its sector peers—largely due to lower return ratios—HDB Financial stands out for several reasons. These include a strong parental backing, a diversified and retail-focused loan book, and robust asset quality.

Its AAA-rated credit profile further supports its attractiveness as a stable long-term investment, especially in a volatile macroeconomic environment.

Final Thoughts

HDB Financial Services’ ₹12,500 crore public issue is poised to become a landmark event for the Indian financial landscape in 2025. With investor interest building up, a solid grey market premium, and strong business fundamentals, the offering has generated significant buzz in market circles.

The listing fulfills regulatory requirements while simultaneously unlocking new growth avenues and transparency for stakeholders. As the subscription window opens, investors will be closely watching how this issue performs—not just at listing, but over the longer term as well.

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