HDB Financial Services IPO: A New Era in India's Financial Market

Overview of HDB Financial Services IPO

The Indian financial sector is on the brink of a significant change with the forthcoming public offering of HDB Financial Services Limited. As a key player in the non-banking financial company (NBFC) sector, HDB's entry into the market signifies an important step in the development of India's retail finance landscape. The IPO application process is made easier through HDFC Sky's One-Click IPO feature, which allows for quick and paperless access to public offerings.

Details of the HDB IPO

Scheduled to open on June 25, 2025, and close on June 27, 2025, the HDB IPO consists of a book-built issue valued at ₹12,500 crore. This includes a fresh issue of 3.38 crore shares (worth ₹2,500 crore) and an offer for sale of 13.51 crore shares (valued at ₹10,000 crore). The price range is set between ₹700 and ₹740 per share, with a minimum application size of 20 shares, making the lowest retail investment ₹14,800. The shares are expected to be listed on both BSE and NSE, with a tentative listing date of July 2, 2025.

This IPO is significant not only for its size but also as a testament to the company's ongoing growth and operational effectiveness in the NBFC sector.

About HDB Financial Services Limited

Founded in 2007, HDB Financial Services operates as a subsidiary of HDFC Bank, offering a wide range of retail lending services. Its operations are divided into Enterprise Lending, Asset Finance, and Consumer Finance, along with providing BPO services to its parent company, which includes back-office operations, collections, and sales support.

As of September 30, 2024, HDB had established 1,772 branches across 1,162 towns and cities in India, supported by over 140,000 dealer touchpoints and more than 80 brand partnerships. This extensive network is crucial for reaching underbanked and first-time borrowers in both urban and rural areas. The IPO presents a unique opportunity to observe how a well-established private NBFC engages with the capital markets while maintaining its focus on grassroots credit delivery.

Financial Performance Overview

HDB's loan portfolio was valued at ₹986.2 billion as of September 2024, evenly distributed across its three business segments. Notably, 71.08% of these loans are asset-backed, reflecting a cautious yet expansive credit strategy. For FY24, the company's profit after tax (PAT) was ₹24,608 million, with total revenue reaching ₹141,711 million and a return on equity (ROE) of 19.55%.

These financial indicators suggest that HDB has successfully balanced rapid growth with risk-adjusted profitability. The Mainboard IPO structure aligns with the increasing investor interest in retail lending and consumer finance-focused NBFCs, with participation available for both institutional and retail investors, adhering to regulatory allocations.

Context of NBFC Growth in India

The NBFC sector in India is experiencing robust growth, driven by initiatives aimed at financial inclusion, increased digital access, and rising middle-class incomes. The demand for credit in the retail segment, including personal, vehicle, and MSME loans, is projected to grow at a CAGR of 15–17% through FY27.

HDB's strategic positioning within this ecosystem, combined with a disciplined risk management framework and a broad geographical presence, distinguishes it from competitors. The company also benefits from a technological advantage, utilizing automated scorecards, digital onboarding, and AI-driven underwriting to enhance operational efficiency.

Key IPO Metrics and Investor Reservations

The IPO allocates 44.92% for Qualified Institutional Buyers (QIBs), 13.48% for Non-Institutional Investors (NIIs), and 31.44% for Retail Individual Investors (RIIs). Retail investors can apply for a minimum of 1 lot (20 shares) at the upper price band, totaling ₹14,800.

Employee and shareholder allocations represent a small fraction of the overall issue. The total shares available in the IPO amount to 16,89,18,919, with the company's earnings per share pegged at ₹31.08 and a net asset value (NAV) of ₹173.3, indicating a strong asset foundation.

Technology and Governance at HDB

HDB is led by a team with over 20 years of experience, many of whom have been with the company since its inception. Their collective expertise is evident in the company's ability to serve over 17.5 million customers while maintaining asset quality, with a gross non-performing asset (GNPA) ratio of 1.90%.

Technology is a cornerstone of HDB's strategy, from app-enabled customer acquisition to data analytics for collections and performance monitoring. This tech-driven approach is supported by a robust backend risk framework involving over 4,500 underwriters and 12,000 collection agents.

Applying for the HDB Financial IPO via HDFC Sky

HDFC Sky’s One-Click IPO feature simplifies the IPO application process, making it quick and efficient. Investors interested in public offerings across various categories can easily apply using this feature.

To apply for the HDB Financial Services IPO using HDFC Sky’s One-Click tool, follow these steps:

● Log in to HDFC Sky: Enter your credentials to access your account on the HDFC Sky platform.

● Access the IPO Section: Go to your profile, select "Indian Stocks," and click on the "IPO" tab.

● Select the IPO: Find the HDB Financial Services IPO in the list and click on "Apply Now."

● Place Your Bid: Enter your desired bid amount and adjust application details as necessary.

● Choose Payment Method: Opt for UPI as your payment method and proceed to payment.

● Approve UPI Mandate: Open your UPI app and authorize the payment request.

● Confirm and Submit: Review your application and finalize the process by submitting it.

Benefits of HDFC Sky’s One-Click IPO Feature

● Quick and seamless process: Apply with a single click, eliminating paperwork and manual entries.

● Instant updates: Get real-time notifications on application status, allotment results, and refunds.

● All-in-one platform: Manage all IPO applications from a single dashboard.

● Anytime access: Conveniently apply through the HDFC Sky mobile app or web interface.

With HDFC Sky’s One-Click IPO feature, applying for the HDB Financial IPO becomes a streamlined and efficient experience, empowering investors to act promptly and confidently.