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HDB Financial Services in India plans to raise Rs 500 crore ($59.85 million) through the reissue of bonds maturing in September 2027. Three bankers confirmed this information as per Business Standard.
The company will offer an annual yield of 8.35% on this bond reissue. This makes them a good investment choice for institutional investors and banks. The Company has already invited bids from bankers and investors.
HDB Enhances Financial Stability Through Bond Issuance
This bond reissue is part of HDB Financial Services' plan to improve its financial position. The funds will be used to grow the company’s loan book. This will support the company’s lending operations and help it offer more financial services to customers across India.
By reissuing the existing bonds, HDB Financial Services simplifies the process by introducing already established terms and conditions. This move shows their confidence in financial stability. It also highlights their ability to meet future obligations.
Investors Perspective
Investors often view such bonds as a stable investment.
The company's strong track record and the attractive yield make these bonds appealing.
The 8.35% yield is notable in the current market with low interest rates.
This reissue lets HDB Financial Services attract investors seeking higher returns than traditional fixed deposits and conservative investments.
HDB IPO Plans
According to a report by the Economic Times, India's largest private lender, HDFC Bank, has begun preparations for the much-anticipated initial public offering (IPO) of its subsidiary, HDB Financial Services.
HDFC Bank owns 94.7% of its subsidiary, HDB Financial Services. It is planning to sell a 10% stake in the upcoming IPO. This could mean the IPO issue size could be between ₹7,500 to ₹10,000 crore. The HDFC bank is also thinking about pre-IPO share placement with investors. They have contacted major investment banks for bids and valuation assessments for the planned IPO.
HDB Financial Services could be valued between $9 billion and $12 billion (₹75,000 crore to ₹1 lakh crore) in the IPO. According to an investment bank source who spoke to the MINT paper, this valuation depends on current market conditions.
HDFC Bank plans to start the share sale for its non-banking financial services arm in either the last quarter of 2024 or the first quarter of 2025. If the IPO happens in 2024, it could be one of the major listings of the year and the first from the merged HDFC Bank and HDFC.
HDB’s Financial Overview: Key Metrics
HDB has shown strong performance over the past year. As of March 31, 2024, the company’s Assets Under Management (AUM) are ₹90,235 crore. It serves 15.5 million customers and operates 1,682 branches.
The company’s total revenue rose from ₹12,403 crore in FY23 to ₹14,171 crore in FY24. Similarly, its Profit After Tax (PAT) increased from ₹1,959 crore in FY23 to ₹2,461 crore in FY24. Read the in-depth analysis here.
Brokers expect a strong listing for HDB Financial due to its solid profitability and strong parent company. The excitement about the IPO is evident, with hdb share price rising over 30% in the past three months in the unlisted market. This boosts hopes for a successful debut.
Is HDB Stock a Good Buy?
All the significant parameters of HDB Financial Shares have shown a positive indicator. This includes revenue, profit, EPS, and the increasing loan book. The operations of HDB have increased in the last 1 year, with its asset quality improving year on year. Hence actively traded in the unlisted share market.
Backed by HDFC, the current hdb financial share price can be a gainful buy, especially with IPO around the corner. At Stockify, we help our clients uncover the best unlisted shares and increase their wealth with our in-depth research and insights. Stockify serves all your unlisted share needs with the best offerings.
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