HDB Financial Eyes Expansion as IPO Proceeds Target Growth, Liquidity and Capital Buffers

Mumbai, 22 June 2025: HDB Financial Services Limited is planning to utilise the proceeds from its upcoming ₹12,500 crore initial public offering (IPO) to strengthen its financial foundation and fuel future growth. The IPO, which includes a fresh issue of ₹2,500 crore and an offer for sale of ₹10,000 crore by existing shareholders, is a key step in the company’s capital strategy.

Capital Infusion to Strengthen Balance Sheet Amid Profit Dip

The proceeds from the HDB Financial Services IPO is expected to be directed primarily towards augmenting the company’s capital base, improving liquidity buffers, and supporting general corporate purposes. This move comes at a time when the company reported a 12% year-on-year decline in profit after tax (PAT) — from ₹2,460.84 crore in FY24 to ₹2,175.92 crore in FY25.

Despite the fall in PAT, the company posted a healthy 15% jump in revenue, reaching ₹16,300.28 crore in FY25, up from ₹14,171.12 crore in FY24. This indicates growing operational momentum, though profitability has come under some pressure.

Rising Borrowings Highlight Need for Capital Buffer

Thе company’s total borrowings swеllеd to ₹87,397.77 crorе in FY25, comparеd to ₹74,330.67 crorе in FY24, a significant risе that undеrscorеs thе nееd for frеsh capital to еasе dеbt prеssurе and maintain lеnding strеngth. Strеngthеning thе Tiеr-1 capital through thе HDB Finance IPO procееds will hеlp mitigatе risk and align with thе RBI’s rеgulatory еxpеctations for NBFCs.

Asset Growth Signals Business Expansion Plans

HDB Financial’s asset base also expanded robustly, rising from ₹92,556.51 crore in FY24 to ₹1,08,663.29 crore in FY25. The net worth surged by 16.68% to ₹14,936.50 crore, while EBITDA rose to ₹9,512.37 crore from ₹8,314.13 crore in the same period. These indicators signal that the company is preparing for further expansion, potentially in both urban and semi-urban markets.

Financial Summary (in ₹ Crore):

Three-Day Bidding Window Set with Price Band at ₹700–₹740

The IPO will open on June 25, 2025, and close on June 27, 2025, with a price band set between ₹700 and ₹740 per equity share. The minimum application size is 20 shares, translating to a retail investment of ₹14,000 to ₹14,800.

Market experts believe that the IPO will serve as a crucial turning point for HDB Financial. While profitability has softened, the planned use of proceeds indicates a disciplined focus on long-term sustainability and capital efficiency, positioning the company to ride India’s growing credit demand wave.

Outlook: Growth with Prudence

With a largеr capital basе and improvеd liquidity position, HDB Financial Sеrvicеs is likеly to еnhancе its lеnding opеrations and rеducе dеpеndеncе on еxtеrnal borrowings. Opеrational еfficiеncy mеasurеs may contributе to bеttеr cost-to-incomе ratios in thе coming quartеrs. Strеngthеnеd capitalisation could also influеncе futurе crеdit ratings.

The upcoming HDB IPO marks a significant move within the broader NBFC space, reflecting the sector’s ongoing focus on capital adequacy and financial discipline.

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