HDB Financial Services is launching an Initial Public Offering (IPO) that includes a ₹2,500-crore fresh capital raise and a ₹10,000-crore offer for sale (OFS) by its parent, HDFC Bank. This move will reduce HDFC Bank’s stake in the company by 20%, bringing down promoter shareholding to 75%.
With assets under management exceeding ₹1 lakh crore as of March 2025, HDB Financial is required to list by September this year in compliance with the Reserve Bank of India’s (RBI) mandate for larger non-banking financial companies (NBFCs). However, investor sentiment may be influenced by the RBI’s October 2025 proposal, which restricts banks from owning subsidiaries that perform overlapping business functions. According to the RBI’s circular, if a bank wishes to maintain such business overlaps, its shareholding in the concerned NBFC must be limited to 20%.
Addressing concerns over regulatory impact, HDB Financial’s Non-Executive Chairman, Arijit Basu, emphasized that there is no operational overlap between HDFC Bank and HDB Financial. He noted that the RBI’s proposal is directed at banks, not their subsidiaries, and the responsibility of compliance lies with the bank itself.
Ramesh G, Managing Director and CEO of HDB Financial, highlighted that the company has independently built its business since its inception in 2008. It operates in segments like enterprise loans, consumer loans, and asset finance, without relying on sourcing from the parent bank. The company also uses a separate technology infrastructure.
In response to queries on valuation, a banker clarified that unlisted or grey market expectations typically do not dictate IPO pricing. Another banker acknowledged that discussions about regulatory uncertainty did occur during pricing deliberations, but the final price band was determined after comprehensive investor roadshows.
There is strong investor interest in the IPO, particularly from mutual funds, insurance firms, and foreign institutional investors. The banker added that HDB Financial is expected to secure one of the most robust anchor investor commitments, with allocations to be revealed on Tuesday.
The IPO, consisting of shares with a face value of ₹10 (subscribable in lots of 20), will be open for public subscription from June 25 to June 27.
Looking ahead, company management has identified asset quality improvement as a key strategic focus.
This IPO marks the second-largest offering in the last three years, trailing only Hyundai’s ₹27,000-crore issue. Several other major listings are in the pipeline, including Tata Capital (a peer of HDB Financial), South Korean electronics firm LG, and Indian startups such as PhonePe and Lenskart.