IPO Details:
- Issue dates: Open June 25, 2025; Close June 27, 2025
- Issue size: ₹12,500 crore (of which ₹2,500 Cr is fresh issue and ₹10,000 Cr OFS)
- Price band: ₹700–740; Minimum lot 20 shares
- Category allocation: ≤50% to QIBs (including 5% for mutual funds), ≥15% to NIIs, ≥35% to RIIs (with special shareholding quota of ₹1,250 Cr for HDFC Bank shareholders and employee reservation)
- Lead Managers: BNP Paribas, Bank of America Securities India, Goldman Sachs (India), HSBC Securities & Capital Markets, IIFL Securities, Jefferies India, JM Financial, Morgan Stanley India
- Registrar: MUFG Intime India Pvt Ltd (formerly Link Intime)
About the Company
HDB Financial Services (HDBFS) is a retail-focused non-banking financial company founded in 2007 and now a subsidiary of HDFC Bank. It offers a wide range of lending products (personal loans, auto and two-wheeler loans, consumer durables, gold loans, business/MSME loans, etc.) as well as back-office BPO and insurance distribution services (HDFC Life, HDFC Ergo). The company operates an omni-channel network of branches and distribution partners across India, serving mostly retail and MSME customers. It has a strong parent backing (HDFC Bank holds ~94.6%), high credit ratings (AAA/Stable), and a track record of steady growth.
- Founded: 2007
- Key services: Diverse retail/MSME lending (personal, auto, two-wheeler, consumer durables, gold, LAP, business loans) plus BPO and insurance distribution
- Network: ~1,770 branches in 31 states/UTs (over 1,160 towns, 80% outside top 20 cities)
- Employees: ~10,000+
- Promoter: HDFC Bank (majority shareholder, ~94.6%)
- Operations: Pan-India (retail and MSME focus, with partnerships across >140,000 dealer/retail touchpoints)
Financials
| Metric (₹ Cr, Consolidated) | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|
| Revenue | 11,312 | 12,403 | 14,173 | 16,300 |
| EBITDA | 4,772 | 6,250 | 8,356 | 9,555 |
| Net Profit (PAT) | 1,153 | 1,959 | 2,461 | 2,176 |
| ROE | ~10.5% | ~16.5% | ~18.5% | ~14.5% |
| Operating margin | ~42% | 50% | 59% | 59% |
| Net profit margin | ~10% | 16% | 17% | 13% |
Anchors
The HDB Financial Services IPO attracted a diverse and high-quality set of 141 anchor investors, with the top 30 representing a mix of leading domestic and global institutions. Life Insurance Corporation of India (LIC) received the largest allocation (6.53%), followed by ICICI Prudential Mutual Fund (6.2%), SBI Mutual Fund (5.9%), Nippon India Mutual Fund (5.5%), and Kotak Mahindra Mutual Fund (4.8%). Other major mutual funds included Axis Mutual Fund (4.2%), Aditya Birla Sun Life Mutual Fund (3.9%), Motilal Oswal Mutual Fund (3.1%), and HSBC Mutual Fund (2.7%). Among global investors, BlackRock (2.5%), Morgan Stanley Investment Funds (2.2%), Allianz Global Investors (2%), Baillie Gifford Pacific Fund (1.9%), Royal Bank of Canada (1.8%), Norway’s Government Pension Fund Global (1.7%), and Abu Dhabi Investment Authority (1.6%) were prominent. Additional international participation came from Fidelity Investments (1.5%), Goldman Sachs (1.4%), Schroders (1.3%), Templeton (1.2%), and Societe Generale (1.1%). Other notable anchors included Tata Investment Corporation (1%), HDFC Life Insurance (0.9%), ICICI Lombard General Insurance (0.8%), Eastspring Investments (0.7%), Edelweiss Mutual Fund (0.7%), Union Mutual Fund (0.6%), Reliance Capital Trustee (0.6%), Clarus Capital (0.5%), and Kotak Mahindra Life Insurance (0.5%). This anchor list reflects strong institutional confidence in HDB Financial Services, with a balanced mix of domestic mutual funds, insurance companies, and top-tier global investors.
Salient Points
- Use of proceeds: ₹2,500 crore fresh issue to bolster Tier-1 capital for on-lending and growth..
- Business mix: Major loan verticals – Consumer Finance (~39% of lending), Asset Finance (~33%), Enterprise Lending (~28%):. Large branch network by region: ~33% North, 26% South, 26% West, 15%
- Growth rates: ~13% revenue CAGR and ~24% PAT CAGR over FY2022–25.
- Margin trends: Operating margin ~50–60%; net profit margin ~15–18% in recent years.
- Asset quality: GNPA at ~1.5–2.7% and NNPA <1% (FY2023–25); PCR ~65%+ (adequate coverage). HDB’s asset quality is poorer than some of the peers like Bajaj Finance (0.44%).
- Capitalization: CRAR ~20% (Tier-1 ~16%, Tier-2 ~4%) and leverage ~5.3x (FY2025) – comfortably above regulatory norms
- NIMs have steadily declined from 8.2% in FY22 to 7.9% in FY24.
Peer Comparison (FY25)
| Companies/ Rs.Cr. | Revenue | Net NPA | P/E | P/B Ratio | ROE | Mcap/sales | D/E |
| HDB Financial Services | 16300 | 0.99% | 28.15 | 3.87 | 14.72% | 3.76 | 5.85 |
| Bajaj Finance | 69,684 | 0.44% | 34.7 | 5.96 | 19.20% | 8.28 | 3.74 |
| Cholamandalam Inv & Fin | 25,846 | 2.63% | 31.7 | 5.71 | 19.70% | 5.23 | 7.40 |
| L&T Finance | 15,924 | 1.7% | 19 | 1.97 | 10.80% | 3.16 | 3.61 |
| Mahindra & Mahindra Fin | 18,463 | 1.59% | 16.4 | 1.72 | 10.90% | 2.01 | 5.53 |
| Shriram Finance | 41,834 | 2.38% | 15.3 | 2.25 | 15.80% | 3.04 | 4.15 |
| Sundaram Finance | 8,486 | 1.38% | 29.1 | 4.14 | 15.50% | 6.45 | 4.63 |
Grey Market Premium
Grey market premium is around ₹51 (≈7% of issue price) as per latest SM posts..
Management Commentary
- MD & CEO Ramesh G. said HDBFS is “committed to enhancing the customer experience through innovation,” highlighting its new NPCI e-KYC Setu initiative for faster loan onboarding.
- Chief Digital Officer Venkata Swamy noted that “digitization is core to our strategy,” referring to the Autonom8 AI platform partnership to streamline and personalize the loan journey.
Opinion
- I intend to apply in the HDB Financial Services IPO.
- Strong parentage (HDFC Bank backing) support a premium on listing day & thereafter, AAA ratings, diversified loan portfolio, and digital initiatives underpin stability going forward.
- HDB’s IPO price fully takes into account premium associated with HDFC Bank, though ityys own performance has bn+not been fully upto the mark .