HDB Financial Services IPO: Biggest Public issue by a non-banking finance company (NBFC) in India in 2025, comes in its last leg as the issue closes today, June 27.
Supported by HDFC Bank, HDB Financial is listing a combination of Rs 2,500 crore fresh issue and Rs 10,000 crore through offer for sale (OFS). An overall subscription of 1.6 times till now doesn’t mean that the retail portion is fully subscribed; it is under-subscribed at 76 per cent till Friday morning—giving investors a last chance to get on board.
Why this IPO matters
The IPO is not merely a fund-raising exercise—it’s a part of the Reserve Bank of India’s directive to ‘upper-layer’ NBFCs to get listed under scale-based regulations. HDB Financial is one of the largest retail-centric NBFCs, with a gross loan book of Rs 1.06 lakh crore and a diversified book over enterprise lending, asset finance, and consumer finance.
Strategy
All analysts remain bullish on HDB’s long-term growth path, with its HDFC Bank heritage, strong credit underwriting, and broad distribution network. Sharekhan opined that the IPO pricing—3.2x to 3.4x FY25 price-to-book—is reasonable considering its better governance and higher growth runway relative to peers such as Bajaj Finance and Chola.
Medium-term risks
Although FY25 has witnessed a decline in net interest margins and increased credit costs marginally, brokerages such as Chola Securities see declining inflation, an interest rate easing cycle, and normal monsoons to buffer risks in the near term. SBI Securities raised similar concerns but issued a ‘Subscribe’ rating based on strong governance and high brand recall.
Where the IPO money will flow
The Rs 2,500 crore collected through the new issue will be utilized to boost HDB’s Tier-I capital level, enabling future growth in loans. The OFS component, on the other hand, will allow HDFC Bank to release value without compromising on regulatory requirements.
Should investors buy?
For retail investors seeking exposure to India’s formal credit boom and long-term NBFC expansion, HDB Financial’s IPO can be an attractive bet. Though near-term returns could be tempered by macro headwinds, fundamentals of the company, brand strength, and capital adequacy plan justify a patient, long-term investment perspective.
