HDB Financial Services is a retail-focused, non-banking financial company (NBFC), a subsidiary of HDFC Bank, established in 2007. Over the years, HDB Financial has made significant strides in the Indian financial services sector, offering a range of financial products to both individuals and businesses.
Now, as part of its growth strategy, the company is stepping into the public market with an Initial Public Offering (IPO) in June 2025. This is expected to be one of the largest NBFC IPOs in India. The IPO will not only provide HDB with funds to fuel its growth but will also allow investors to take a piece of this promising financial player.
Why is HDB Financial Services Going Public?
The company is looking to raise ₹12,500 crores through this IPO, a mix of ₹2,500 crore from the fresh issue and ₹10,000 crore from the Offer for Sale (OFS) by its parent company, HDFC Bank. By going public, HDB aims to meet the regulatory requirement of having at least 25% public shareholding in its stock, a directive issued by SEBI (Securities and Exchange Board of India).
Additionally, part of the funds raised from the fresh issue will be used to augment HDB’s Tier-I capital base, which is essential for supporting its future growth and lending activities.
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Current Status of HDB Financial Services
As of FY2025, HDB Financial Services operates through 1,771 branches spread across 31 states and union territories. With a large footprint in non-metro areas, it serves millions of customers, providing financial products such as loans for vehicles, construction equipment, and personal finance. The company has consistently grown its loan book and has a strong presence in the retail and MSME (Micro, Small, and Medium Enterprises) lending space.
In FY2024, the company reported a revenue of ₹14,171 crore and a net profit of ₹2,460 crore. Despite its growth, HDB Financial has faced some pressure on its profitability due to increased provisions and rising non-performing assets (NPAs). However, its strong brand value and backing from HDFC Bank provide it with a solid foundation to continue expanding.
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HDB Financial Services Financials (Year-On-Year)
| Metric | FY 2025 | FY 2024 | FY 2023 |
| Revenue (₹ crore) | 16,300.28 | 14,171.12 | 12,402.88 |
| Profit After Tax (₹ crore) | 2,175.92 | 2,460.84 | 1,959.35 |
| EBITDA (₹ crore) | 9,512.37 | 8,314.13 | 6,251.16 |
| Total Borrowing (₹ crore) | 87,397.77 | 74,330.67 | 54,865.31 |
| Net Worth (₹ crore) | 14,936.50 | 12,802.76 | 10,436.09 |
HDB Financial IPO Details
| Parameter | Details |
| IPO Open Date | June 25, 2025 |
| IPO Close Date | June 27, 2025 |
| Price Band | ₹700 to ₹740 per share |
| Lot Size | 20 shares |
| Fresh Issue | 3.38 crore shares worth ₹2,500 crore |
| Offer for Sale | 13.51 crore shares worth ₹10,000 crore |
| Issue Size | ₹12,500 crore |
| Tentative Listing Date | July 2, 2025 |
| Face Value | ₹10 per share |
Shareholding Pattern of HDB Financial Services
| Shareholder | Pre-Issue Holding | Post-Issue Holding |
| HDFC Bank | 94.32% | 74.19% |
| Public | 5.68% | 25.81% |
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Fund Utilisation Plan
The funds raised from the fresh issue will primarily be used for expanding HDB Financial’s business across its existing verticals: enterprise lending, asset finance, and consumer finance. Additionally, a portion of the funds will be allocated for the general corporate purposes, including working capital requirements.
Should You Invest in HDB Financial Services IPO?
Advantages of Investing
- Strong Parentage: Backed by HDFC Bank, the company enjoys a strong reputation and brand value.
- Growth Potential: HDB Financial Services has a strong presence across India, especially in non-metro and semi-urban markets. Its focus on underserved customer segments positions it well for steady growth.
- Diversified Offerings: The company has a diversified product portfolio, providing loans for vehicles, equipment, and personal finance.
- Strong Financials: HDB has shown consistent revenue growth, though profitability faced pressure in FY25 with a ~12% decline in net profit compared to the previous year.
Disadvantages to Consider
- Asset Quality Concerns: The company has faced challenges with its asset quality, as seen from the rise in NPAs.
- Market Sentiment: Investor enthusiasm around HDB Financial Services’ IPO has softened in recent days. Although there was strong initial interest in the grey market, the premium has now settled at 7%, suggesting that investor excitement has become more cautious and balanced.
- Regulatory Risk: As a non-banking financial company, regulatory changes can impact business operations, and any change in the HDFC licensing agreement could pose risks.
Bottomline
The HDB Financial Services IPO offers an exciting opportunity for investors, especially those looking to tap into the growing NBFC sector in India. While the strong backing from HDFC Bank and the company’s retail focus make it an attractive proposition, investors should be mindful of the risks, including asset quality and market sentiment. If you are willing to take on some level of risk, this could be a worthwhile long-term investment.
