HDB Financial Services, India's leading non-banking financial company, lost half of its market value in a year due to weak financial performance. During the pandemic, the company was hit hard and faced various challenges in maintaining its financials effectively. Losing half of its market value in a year is a matter of concern for the company as well as investors who buy HDB financial services unlisted shares. This article will discuss the possibility of increasing unlisted share price this year.
Why HDB Financial Services Lost 50% of Its Market Value?
2020 was a nightmare for companies due to unstable business operations and losses. However, HDB Financial Services Ltd is one of the few companies losing 50% of its market value in a year. This impact can also be seen in HDB Financial Services unlisted share price, which goes down from Rs 1,200 to Rs 625 per share in a year.
HDB Financial Services is a wholly owned subsidiary of HDFC Bank, a big name in the banking sector. The lower market valuation of HDB Financial Services created insecurity among its investors. Here are the prominent reasons why HDB Financial Services lost half of its market value in a year:
Weak Financial Performance
The biggest reason, which is considered the major dip in the market valuation of HDB Financial Services, is its weak financial performance. In FY 2020, the company's operating revenue dropped from Rs 10,944 crore to Rs 10,756 crore. Moreover, HDB Financial Services also recorded the slowest loan book growth this year, which was only 2.5% in a year.
Lower Demand
During FY20-21, HDB Financial Services experienced lower demand for its services. As a result, its Compound Annual Growth Rate (CAGR) dropped from 8.9% to 5.3%. It is a negative sign for the business as consumers prefer not to take any service due to interrupted cash flow. The lower customer demand directly affects the company's revenue and increases the annual loss.
Unstable Market
The market condition is unfavourable for the companies like HDB Financial Services during FY 2020-21. During this year, HDB Financial Services also struggled in the Pre-IPO market as the demand for its unlisted shares also reduced. Another major reason for the most significant drop in the market value of HDB Financial Services is unstable market conditions.
Can HDB Financial Services Unlisted Shares Bounce Back In 2023?
Since the performance of the unlisted shares depends on the share market conditions and the company's growth, it is difficult to predict the exact value of HDB Financial Services unlisted shares in the coming months of 2023. The company takes every necessary step to recover from its past losses and works towards increasing its market valuation.
We can also expect its IPO, which might launch at the end of this year. Since the company does not mention the estimated HDB Financial Services IPO share price, investors must analyse its financials for the previous fiscal years to make an informed decision. Here is the updated financial report of HDB Financial Services for the fiscal year 2018-19, 2019-20, 2020-21, and 2021-22.
| Particulars (in cr.) | 2018-19 | 2019-20 | 2020-21 | 2021-22 |
| Total Revenue | 8,724 | 10,756 | 10,944 | 11,306 |
| Profit After Tax | 1,153 | 1,004 | 391.47 | 1,011 |
| Profit Before Tax | 1,724 | 1,464 | 500.71 | 1,347 |
| Asset Under Management | 55,425 | 58,833 | 61,561 | 61,444 |
| Borrowing | 45,105 | 49,804 | 50,358 | 48,973 |
| Earning Per Share | 14.71 | 12.78 | 4.97 | 12.91 |
| Book Value Per Share | 91.36 | 101.08 | 107.02 | 120.69 |
| Shareholder's Funds | 7,178 | 8,017 | 8,446 | 9,539 |
As per the financial report of HDB Financial Services, it is clear that FY 2020-21 was the year when it recorded a weak financial performance. However, the company steadily recovered from the loss in the next financial year, 2021-22. There is a chance that HDB Financial Services unlisted shares might bounce back and give a good return on investment in the coming months of 2023. Buying HDB Financial Services unlisted shares for future prospective growth is also recommended.
Buy HDB Financial Services Pre-IPO Shares From Stockify
The good news for the investors is that HDB Financial Services is taking essential steps to recover from the previous loss, which is clearly shown in its FY 2021-22 financial performance. You should buy unlisted shares of HDB Financial Services as it might perform better than expected in the future.
Stockify provides access to the unlisted shares of companies along with updated financial reports and Pre-IPO share prices. Here, you will get guidance in selecting the right unlisted shares per risk appetite. To start investing in HDB Financial Services and other companies' pre-IPO stocks, connect with the best unlisted shares broker in India now!
FAQs
1- Why Did HDB Financial Services Lose Half Of Its Market Value?
Ans- HDB Financial Services lost half of its market value due to weak financial performance in FY 2020-21.
2- Is It Beneficial To Invest In HDB Financial Services In 2023?
Ans- The company's financial performance improved last year, which is a positive sign for investors. You should invest in HDB Financial Services unlisted shares.
3- What Will Be The HDB Financial Service Price NSE?
Ans- The HDB Financial Service price on the NSE cannot be determined before its listing on the stock exchange.
4- How To Buy HDB Financial Services Pre-IPO Shares Online?
Ans- You can buy unlisted shares of HDB Financial Services by using Stockify. Here, you will also access other companies' unlisted shares.
5- What Is The Current HDB Financial Services Share Price?
Ans- The current unlisted share price of HDB Financial Services is Rs 655 per share. To check the updated share price, use Stockify.
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