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20 Jun, 2025
HDB Financial Services, the NBFC arm of HDFC Bank, is set to launch its ₹12,500-crore IPO, which will open for public subscription from June 25 to June 27, 2025. The IPO comprises a fresh issue of ₹2,500 crore and an offer for sale (OFS) of ₹10,000 crore by HDFC Bank, which currently holds a 94.3% stake in HDB Financial. The price band for the issue is set at ₹700-740 per share, with a minimum application lot of 20 shares.
The allocation structure reserves 50% of the shares for qualified institutional buyers (QIBs), 15% for non-institutional investors (NIIs) and 35% for retail investors. Additionally, shares worth ₹20 crore are reserved for employees and ₹1,250 crore for HDFC Bank shareholders. Anchor investors can bid on June 24, a day before the issue opens to the public.
The proceeds from the fresh issue, amounting to ₹2,500 crore, will be used primarily to augment HDB Financial’s Tier-1 capital base. This capital boost is intended to meet the company’s future capital requirements, including onward lending and supporting growth across its business verticals: enterprise lending, asset finance and consumer finance. Strengthening the capital base will also help HDB Financial maintain regulatory compliance, particularly as it falls under the RBI’s “Upper Layer” NBFC category, which mandates higher governance and capital standards.
Founded in 2007, HDB Financial has built a robust retail-focused lending franchise with a diversified portfolio spanning enterprise, asset and consumer finance. Its pan-India network of 1,792 branches in over 1,100 cities allows deep penetration into Tier 3–6 markets. The company’s granular retail lending model, digital underwriting and multi-vertical structure provide resilience across credit cycles. As of March 2025, HDB’s customer base stood at 19.2 million, with a gross loan book of ₹1.07 lakh crore.
HDB Financial Services has reported strong growth in its loan book and revenues but profitability has come under pressure due to rising non-performing assets (NPAs) and provisioning costs. As of March 31, 2025, the company’s loan book stood at ₹1,03,343 crore, with a growth of 19.2% year-on-year from ₹86,721 crore in the previous year. Consolidated revenue from operations increased to ₹16,300 crore in FY25 from ₹14,171 crore in FY24, reflecting a 15% growth.
However, the company’s profit after tax (PAT) declined to ₹2,175.9 crore in FY25 from ₹2,460.8 crore in FY24, an 11.6% drop. This decline is attributed to a sharp rise in provisioning for bad loans, with the gross Stage 3 asset ratio rising to 2.26% in FY25 from 1.90% a year earlier. The provision coverage ratio also fell, indicating increased stress in the loan book, especially in the personal loan and MSME segments. Despite these challenges, HDB Financial continues to expand its customer base and branch network, serving over 18 million customers through nearly 1,800 branches as of Q3 FY25.
India’s credit market is projected to grow at a 7.2% CAGR from 2025 to 2029, reaching $956.7 billion. HDB’s scalable business model, digital capabilities and rural reach position it to benefit from this expansion. Long-term projections suggest HDB could quadruple its loan book and customer base by FY35 if it maintains its current execution and strategy, potentially becoming an INR 5 trillion AUM franchise with top-tier return ratios.
HDB Financial Services’ ₹12,500-crore IPO stands out as the largest NBFC public issue of the year, offering investors a chance to participate in the growth story of a leading retail-focused lender. The company’s strong loan growth and expanding footprint highlight its market potential, but investors should be mindful of the recent decline in profitability and rising asset quality pressures. The fresh capital infusion from the IPO is expected to strengthen HDB’s balance sheet, support future lending and ensure compliance with stricter regulatory norms. As the company prepares for listing, its performance in managing asset quality and sustaining growth
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