HDB Financial Services IPO looms as HDFC sets stage to list its NBFC subsidiary

HDB Financial Services is a leading Non-Banking Financial Corporation (NBFC) that primarily deals in vehicle loans, loan-against-property, and personal loans. This non-deposit-taking company provides financing to micro/small and medium enterprises (MSMEs) across India. The firm operates with a capacity of 1600 branches across India and is one of the largest finance companies in terms of market capitalization. With the prospects of HDB’s IPO, Investors are showing excitement over the launch, as this could be one of the biggest IPOs of 2024. 

Why is HDB’s IPO significant?

Top investment banks have been approached for bids and valuation assessment for the proposed IPO. The expected valuation of HDB Financial is $9 Billion to $12 Billion. The HDFC bank is expected to sell 10% stakes and plans to raise Rs. 7500-10,000 Crores. As of 31st March 2023, the company has generated a revenue of Rs. 12,403 Crores with a net profit of Rs. 1959 Crores. The company has an asset base of $6.9 billion and a loan portfolio of $6.7 billion. It is also important to note that the company needs to be listed before September 2025 to comply with RBI’s regulations. 

How did HDB Financial Services operate in the NBFC Sector?

Since its inception, HDB Financial has made its presence known in the NBFC sector, resulting in capturing a significant market share in the Indian financial lending market. The company has obtained CARE AAA and CRISIL AAA ratings for long-term debt and banking facilities; and an A1+ rating for short-term debt and commercial papers which makes it one of the most trusted financial institutions in India. This subsidiary of HDFC has also outperformed its competitors like Cholamandalam Investment & Finance Company and Sundaram Finance Ltd. by performing remarkably well in the unlisted market as it provided investors with significant returns. 

What is the investor sentiment toward HDB Financial’s IPO?

With the announcement of HDB Financial IPO, there has been a recent uptrend seen in the grey market for HDB Financial share price. Given the company’s historical record of profitability, the enthusiasm surrounding HDB’s IPO is also reflected in HDB share prices in the unlisted market which has recorded a hike of 30% in the past three months. In the unlisted market, the HDB stock trades between Rs 900-1000. Investors are anticipating a successful debut indicating a positive sentiment towards the launch of HDB Financial’s IPO in the stock market. 

Exploring the Potential of HDB Financial Services: A lucrative investment?

With an impressive holdings of 94.7% stake in HDB Financial Services, HDFC Bank aims for its first listing from the merger of HDFC Bank and HDFC entity. Despite COVID-19,the financial performance of HDB indicates robust growth in terms of asset growth and asset quality. In the last five years, the AUM of the company stands at Rs. 83, 989 Crores with a CAGR of 8.4%. With a diversified product portfolio, HDB seeks to expand further into durable financing, gold loans, and digital product loans. 

With a strong presence in the NBFC sector and strong financial performance metrics, HDB Financial’s share price in the unlisted market presents an attractive investment opportunity for investors who are seeking exposure to India’s financial markets. This much-anticipated IPO further underscores the company’s growth prospects and potential value creation for stakeholders. 

Interested in purchasing HDB shares before its IPO?

HDB Financial’s IPO is generating significant buzz in the market. With a strong presence in the NBFC sector and an impressive record of financial performance, investors are already yielding significant returns by purchasing HDB’s share in the unlisted market. By investing in HDB unlisted shares through Stockify, you can secure early access and potentially benefit from better valuations when the IPO hits the market. Don’t miss out on the opportunity to invest in HDB Financial with Stockify.

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HDFC Bank has kickstarted the process of launching its subsidiary HDB Financial’s IPO. Currently, the bank holds nearly 94.7% of stakes in HDB Financial. With plans to divest its 10% stake, the company is expecting to raise an issue size ranging from Rs, 7500-10,000 crores from the IPO. There are also considerations for a pre-IPO share placement with the investors leading to higher anticipation for the IPO launch.


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