HDB Financial Services IPO Seen as a Gamechanger for NBFC Sector Ahead of ₹12,500 Cr Listing

Mumbai, 22 June 2025: HDB Financial Services Limited, the retail-focused NBFC promoted by HDFC Bank, is gearing up for its highly anticipated ₹12,500 crore Initial Public Offering (IPO), opening on 25 June 2025. The upcoming issue marks a significant milestone in India’s Non-Banking Financial Company (NBFC) sector, given the scale of fundraising and the company’s strategic role in retail lending and financial inclusion.

IPO Details Reveal Massive Fundraising Plan

The book-built issue consists of a fresh issue of ₹2,500 crore and an offer for sale (OFS) worth ₹10,000 crore by existing shareholders. The HDB Financial Services IPO price band is set between ₹700 to ₹740 per share, with a minimum lot size of 20 shares, requiring a minimum investment of ₹14,800.

The IPO subscription window will remain open from 25 June to 27 June 2025, with listing expected on 2 July 2025 on both the BSE and NSE. Allotment finalisation is scheduled for 30 June, followed by refunds and demat credit on 1 July 2025.

Aims to Strengthen Capital Base and Fuel Lending Growth

Proceeds from the HDB Finance IPO will be directed towards augmenting the company’s Tier-I capital base, enabling it to meet future capital requirements, including onward lending. The move comes amid strong growth in retail credit demand and a rapidly evolving lending environment.

Wider Reach, Strong Backing and Phygital Strategy Powering Growth

Established in 2007, HDB Financial Services operates with a unique phygital distribution model, blending physical infrastructure with digital interfaces. As of 30 September 2024, the company managed operations through 1,772 branches across 31 states and union territories, supported by over 140,000 dealer touchpoints and partnerships with more than 80 brands.

With a focus on underbanked and first-time borrowers, the company has built a highly granular loan portfolio and serves 17.5 million customers.

Diverse Lending Portfolio Aligned with Market Trends

HDB Financial Services’ lending operations are divided into three key verticals—Enterprise Lending (39.85%), Asset Finance (37.36%), and Consumer Finance (22.79%). These include a mix of secured and unsecured loan offerings, tailored to the MSME segment, income-generating assets, and retail consumers.

As of September 2024, its gross loan book stood at ₹986.2 billion, with over 71% of assets backed by collateral and no single product exceeding 25% of the book. The company also earns fee-based revenue via BPO services and insurance distribution.

Financial Snapshot Shows Steady Growth and Resilience

In the financial year ended 31 March 2025, the company’s revenue rose by 15% to ₹16,300.28 crore, compared to ₹14,171.12 crore in FY24. However, profit after tax (PAT) declined by 12%, coming in at ₹2,175.92 crore from ₹2,460.84 crore in the previous year. EBITDA rose to ₹9,512.37 crore from ₹8,314.13 crore, reflecting improved operational efficiency.

Net worth stood at ₹14,936.50 crore while reserves increased to ₹15,023.97 crore. Total borrowings grew to ₹87,397.77 crore as of FY25, highlighting the company’s aggressive credit expansion strategy.

IPO Reservation Details

IPO Valuation Metrics

Sector Outlook and Why Timing Matters

India’s NBFC sector is poised for sustained growth, with credit expected to expand at a 15–17% CAGR through FY27. NBFCs are projected to command nearly 21% of systemic credit by then. Key growth drivers include a booming middle class, enhanced financial inclusion, government housing schemes, and growing demand in Tier 2–4 markets.

Retail credit remains a stronghold, forming over 58% of NBFC loans, with segments like housing and vehicle finance projected to maintain strong momentum.

With HDB’s focus on underpenetrated markets and first-time borrowers, the company is uniquely placed to ride this growth wave. Over 80% of its branches are located in non-metro regions, aligning well with government goals and rural credit expansion.

Technology at the Centre of Transformation

The company continues to enhance customer engagement and operational efficiency through digital transformation. Automated underwriting, AI-driven risk modelling, and app-based collections are core to its strategy. Its mobile app has seen over 6.9 million downloads, enabling wide reach and user engagement.

Strong Parentage and Legacy Support

Backed by HDFC Bank, which holds a 94.36% pre-issue stake, HDB Financial benefits from strong brand credibility, access to banking infrastructure, and legacy systems that support its governance and operations.

What Lies Ahead

With the HDB IPO date approaching and broader NBFC trends showing upward momentum, HDB Financial Services is entering public markets at a crucial time, one that could reshape its growth trajectory and possibly redefine benchmarks in the retail NBFC space.

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