HDB Financial IPO Valuation: Price-to-Earnings Ratio Pegged at 28.15 Post-Issue; NAV Reflects Financial Growth Ahead of ₹12,500 Crore Offer 

Mumbai, 24 June 2025: HDB Financial Services Limited, the retail-focused NBFC backed by HDFC Bank, is gearing up for its highly anticipated ₹12,500 crore Initial Public Offering (IPO), set to open on 25 June 2025. The valuation metrics, including the Price-to-Earnings (P/E) ratio and Net Asset Value (NAV), have drawn attention for what could become one of the largest NBFC listings in India. 

Post-Issue P/E Rises to 28.15 Amid Fresh Capital Infusion 

The HDB Financial Services IPO comprises a fresh issue of 3.38 crore equity shares amounting to ₹2,500 crore and an offer for sale (OFS) of 13.51 crore shares worth ₹10,000 crore. The company has set a price band of ₹700 to ₹740 per share. At the upper price band, the post-issue P/E multiple stands at 28.15x, based on the FY25 earnings. 

The Earnings Per Share (EPS) post-issue has been calculated at ₹26.29, down from the pre-issue EPS of ₹27.41, reflecting the equity dilution. Despite the marginal dip in EPS, the increased P/E indicates strong valuation expectations in the current market cycle. 

Net Worth and Price-to-Book Show Financial Strength 

The company’s restated consolidated financials for the year ending 31 March 2025 report a net worth of ₹14,936.50 crore, while the Price-to-Book Value ratio is noted at 3.72x. This metric reflects the premium investors are willing to pay above the book value, suggesting market confidence in the company’s underlying assets and growth trajectory. 

NAV Growth Mirrors Expansion and Profit Retention 

As per the red herring prospectus, HDB Financial’s net worth has grown steadily from ₹10,436.09 crore in FY23 to ₹12,802.76 crore in FY24 and further to ₹14,936.50 crore in FY25. This rise aligns with the company’s asset base expansion to ₹1,08,663.29 crore in FY25, up from ₹92,556.51 crore a year earlier. 

In addition to this NAV growth, the increase in Reserves and Surplus from ₹12,949.63 crore in FY24 to ₹15,023.97 crore in FY25 supports the valuation multiples reflected in HDB Finance IPO pricing. 

Market Capitalisation Estimated at Over ₹61,253 Crore 

At the upper band of ₹740 per share, HDB IPO will result in a post-issue market capitalisation of ₹61,253.30 crore. The shareholding pattern will change significantly after the issue, with HDFC Bank’s promoter holding expected to reduce from 94.32% to 74.19%. 

The total number of outstanding shares will rise from 79.39 crore to 82.77 crore post-issue. 

Valuation in Context: Revenue Rises, PAT Slips 

The company reported revenue of ₹16,300.28 crore for FY25, a 15% increase from ₹14,171.12 crore in FY24. However, profit after tax declined by 12% to ₹2,175.92 crore from ₹2,460.84 crore a year earlier. Despite the profit drop, the EBITDA rose to ₹9,512.37 crore in FY25 from ₹8,314.13 crore in FY24, showing operational strength. 

Return on Equity (ROE) stood at 14.72%, while the Debt-to-Equity ratio was relatively high at 5.85x, underlining a leveraged growth model supported by strong credit management systems. 

IPO Details: Key Dates and Investor Breakdown 

The IPO opens for public subscription from 25 June 2025 to 27 June 2025. Allotment is expected by 30 June, with listing likely on 2 July 2025 on both BSE and NSE. 

Out of the total 16.89 crore shares on offer, 44.92% are reserved for Qualified Institutional Buyers (QIBs), 13.48% for Non-Institutional Investors (NIIs), 31.44% for Retail Individual Investors (RIIs), and 10% for shareholders of HDFC Bank. 

Lot Size and Minimum Investment 

Investors can bid in lots of 20 shares. Based on the upper price band of ₹740 per share, here are the lot-wise investment details: 

Retail investors are permitted to bid at the cut-off price, while high net-worth individuals (HNIs) under the sNII and bNII categories must specify their price bids. 

Conclusion 

The valuation metrics presented in the offer document, including the Price-to-Earnings ratio, NAV movement, and financial indicators, outline the company’s current financial structure ahead of its market debut. These figures reflect the impact of equity dilution, capital infusion, and recent profitability trends as HDB Financial Services prepares for listing. 

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