HDB Financial Services Lists at 12.84% Premium on Strong Institutional Support

The retail-focused non-banking financial company, HDB Financial Services Limited, made a strong debut on both BSE and NSE platforms on July 2, 2025. After closing its IPO bidding between June 24 - June 27, 2025, the company commenced trading with an impressive 12.84% premium to its issue price, delivering solid returns to investors backed by HDFC Bank's strong brand equity. This book-building IPO raised ₹12,500 crore with an outstanding subscription of 17.65 times, reflecting exceptional investor confidence in the NBFC sector as India's fourth-largest IPO sought to augment Tier-I capital base for future growth across enterprise lending, asset finance, and consumer finance verticals.

HDB Financial Services Listing Details

HDB Financial Services Limited launched its IPO at ₹740 per share with minimum investment of 20 shares costing ₹14,800. The IPO received exceptional response with subscription of 17.65 times - QIB segment leading at a remarkable 58.64 times, NII at 10.55 times, and retail at 1.51 times, demonstrating strong institutional confidence despite modest retail participation. The share price listed at ₹835 on both BSE and NSE, delivering an impressive 12.84% premium from the issue price of ₹740, validating market confidence in the HDFC Bank-backed NBFC.

Listing Price: The HDB Financial Services share price opened at ₹835 on both BSE and NSE on July 2, 2025, representing a premium of 12.84% from the issue price of ₹740, delivering strong gains for investors and reflecting confidence in HDFC group's track record.

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First-Day Trading Performance Outlook

HDB Financial Services delivered robust debut performance, significantly outperforming market expectations with strong premiums across exchanges, reflecting investor confidence in the HDFC Bank-backed NBFC's market positioning. The company, incorporated in 2007, operates as India's seventh-largest diversified NBFC with pan-India network of 1,771 branches across 1,170 towns and cities, serving underbanked customer segments through enterprise lending, asset finance, and consumer finance verticals with over 60,432 employees.

Growth Drivers and Challenges

Growth Drivers:

• Strong Parent Brand: Backed by HDFC Bank with established market credibility and access to capital, technology, and distribution networks

• Pan-India Presence: Extensive network of 1,771 branches across 1,170 towns with over 80% located outside top 20 cities, serving underbanked segments

• Diversified Portfolio: Comprehensive offerings across enterprise lending, asset finance, and consumer finance with proven track record through economic cycles

• Omni-channel Distribution: "Phygital" model combining branch network, tele-calling teams, and external distribution channels for comprehensive market reach

Challenges:

• Profit Decline: PAT dropped 12% in FY25 despite 15% revenue growth, indicating margin pressure from interest rate volatility

• High Leverage: Debt-to-equity ratio of 5.85 typical for NBFCs but requires careful interest rate risk management

• Fully Priced Valuation: Post-issue P/E of 28.15 suggests premium pricing despite recent profit decline

• Regulatory Environment: NBFC sector subject to evolving regulatory framework and capital adequacy requirements

Utilisation of IPO Proceeds

• Tier-I Capital Augmentation: ₹2,500 crore from fresh issue for augmenting Tier-I capital base to meet future capital requirements and support onward lending across all business verticals

• Offer for Sale: ₹10,000 crore from OFS providing exit opportunity to HDFC Bank whilst maintaining majority control at 74.19% post-IPO

Financial Performance of HDB Financial Services

Revenue: ₹16,300.28 crore for FY25, showing solid 15% growth from ₹14,171.12 crore in FY24, reflecting business expansion and market penetration

Net Profit: ₹2,175.92 crore in FY25, demonstrating 12% decline from ₹2,460.84 crore in FY24, indicating margin pressure from interest rate volatility and competitive dynamics

Financial Metrics: Healthy ROE of 14.72%, elevated debt-to-equity of 5.85% typical for NBFC operations, moderate price-to-book value of 3.72, with strong asset base of ₹1,08,663.29 crore