HDB Financial Services, a prominent non-banking financial company (NBFC) in India and a subsidiary of HDFC Bank, is set to launch its Initial Public Offering (IPO) to raise up to ₹12,500 crore (approximately $1.5 billion).

Company Overview

Established in 2007, HDB Financial Services offers a diverse range of secured and unsecured loan products, including personal loans, business loans, and asset financing. With a robust presence across India, the company operates over 1,680 branches, catering to both retail and commercial clients.

IPO Details

• IPO Size: The total issue size is ₹12,500 crore, comprising a fresh issue of ₹2,500 crore and an Offer for Sale (OFS) of ₹10,000 crore by HDFC Bank, which holds a 94.6% stake in HDB Financial Services.Price Band: The exact price band has not been announced yet and will be determined in consultation with the lead book-running managers.Lot Size: Details regarding the minimum lot size for investors are yet to be disclosed.
• Key Dates: The specific dates for the IPO, including the opening and closing dates, are yet to be announced.

Utilization of Funds

The proceeds from the fresh issue of ₹2,500 crore are intended to augment the company’s Tier-I capital base, supporting future capital requirements and business growth.

Financial Performance

As of September 30, 2024, HDB Financial Services reported a gross loan book of ₹98,620 crore, reflecting significant growth over the past two years. The company achieved a profit of ₹2,460 crore in the fiscal year 2023-24, marking a nearly 56% increase from the previous year. However, the net interest margin slightly declined to 7.85% from 8.25% in the prior year.

Subscription Status

Information regarding the IPO subscription status will be available once the issue opens for public subscription.

Investor Considerations

Potential investors should note that, despite the OFS component, HDB Financial Services will continue to operate as a subsidiary of HDFC Bank post-IPO. The listing aligns with regulatory requirements mandating large NBFCs to be publicly listed by September 2025.

Conclusion

The upcoming HDB Financial Services IPO presents an opportunity to invest in a leading NBFC with a strong parentage and a diversified product portfolio. Prospective investors should stay tuned for further announcements regarding the price band, lot size, and specific dates to make informed investment decisions.