HDB Financial Services surprised investors on Friday. The company set its IPO price band at Rs 700 to Rs 740 per share. This is a sharp 42% discount compared to its value in the unlisted market. At the highest price of Rs 740, the company’s market value would be around Rs 58,889 crore.
HDB Financial IPO shocker
What is HDB Financial Services?
- It is the NBFC arm of HDFC Bank.
- It began in 2007 and has grown quickly.
- It offers personal loans, business loans, vehicle loans, gold loans, etc.
- As of March 2024, it had revenue of around ₹78.9 billion and profit of ₹11.7 billion
- It has over 1,700 branches across India, mostly in cities outside the metro areas .
IPO Size and Structure
- The IPO size is ₹12,500 crore, making it one of India’s largest in 2025
- This is broken into:
- Fresh issue of ₹2,500 crore (new shares)
- Offer-for-sale (OFS) by HDFC Bank worth ₹10,000 crore
- Fresh issue funds will boost its Tier‑I capital and support future lending
3. Price Band and Valuation
- IPO price band is ₹700 to ₹740 per share
- At ₹740 a share, the total valuation of HDB is about ₹58,889 crore (≈ $7.1 billion)
- This is 42% below the “grey market” (unlisted) share price of ₹1,200–1,250
- Grey‑market traders expect listing gains, showing a premium of around ₹83 (GMP), or ~11% on upper band
- But bankers say pricing is based on business fundamentals and peer valuations—not grey‑market rates.
- At ₹740, the P/B ratio is about 3.72—similar to rivals like Bajaj Finance and Shriram Finance.
Retail Portion & Allocation
- Retail investors get at least 35% of the net IPO shares
- Qualified Institutional Buyers (QIBs) can get up to 50%.
- Non-Institutional Investors (HNIs) have a 15% share
- Minimum retail investment is 20 shares (₹14,800–₹14,880).
- Small HNI require minimal investment around ₹2 lakh
Timeline of IPO
- Open: June 25, 2025
- Close: June 27, 2025
- Allotment finalization: June 30, 2025
- Refunds & share credit: July 1, 2025
- Listing date: July 2, 2025 on NSE & BSE
6. Company Financial Snapshot
| Financial Metric | FY 2022 | FY 2023 | FY 2024 | H1 FY2025 |
|---|---|---|---|---|
| Revenue (₹ cr) | 11,306 | 12,403 | 14,171 | 16,300 |
| Profit After Tax (₹ cr) | 1,011 | 1,959 | 2,461 | 2,176* |
| Gross Loan Portfolio (₹ cr) (Sep 2024) | — | — | — | 98,620 |
| AUM (Assets Under Management) (₹ cr) | — | — | — | 90,230 |
*H1 FY2025 actual figure for Sep 2024
- GNPA is 2.10%, NNPA 0.83%—this shows a strong asset quality ipocentral.in.
- Aug 2024’s return on equity (RoE) is ~19.6%, and CRAR at 19.3% .
The “Shocker”: Price Band 42% Below Grey Market
- Grey market trades place HDB at ₹1,200–1,250
- IPO top band (₹740) is about 42% lower than ₹1,250.
- The public issue pricing surprised many investors because it’s well below grey market value.
- Analysts said this follows fundamentals and peer valuations—not speculative hype.
Why Such a Discount?
For Retail Investors
- Retail allotment portion is solid at ≥ 35%.
- Minimum application is ~₹14,800.
- Many expect an 11% listing pop (share may open near ₹823).
- But actual listing price could depend on grey market sentiment and greenshoe allocations.
Risks and Considerations
- Strong loan growth may hit if the economy slows or rates rise.
- NBFCs are often exposed to unsecured lending and collateral risks.
- New RBI mandates require system upgrades and compliance measures.
- Relies heavily on HDFC Bank for technology, brand, and lending support.
- But its AAA credit ratings (CRISIL & CARE) suggest safety
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