HDB Financial Showcases 161.34% LCR Ahead of IPO, Signals Strong Liquidity Buffer
By Shishta Dutta | Updated at: Jun 19, 2025 09:23 PM IST
Mumbai, June 19 — As HDB Financial Services Ltd gears up for its highly anticipated IPO, the company has reported a Liquidity Coverage Ratio (LCR) of 161.34% for the quarter ended March 31, 2025, well above the 100% RBI-mandated threshold, highlighting its strong short-term liquidity position.
The disclosure comes at a critical juncture, reinforcing investor confidence in the company’s balance sheet strength as it prepares to go public. Analysts say this level of regulatory liquidity coverage underscores prudent financial management and enhances HDB’s appeal among institutional and retail investors.
Liquidity Highlights – March 2025
| Metric | Value |
|---|---|
| Liquidity Coverage Ratio (LCR) | 161.34% |
| High-Quality Liquid Assets (HQLA) | ₹2,331 Cr |
| Net Cash Outflows (30-day stress period) | ₹1,445 Cr |
Funding Profile: Low Risk, Diversified
| Instrument Type | Amount (₹ Cr) | % of Total Liabilities |
|---|---|---|
| Non-Convertible Debentures (NCDs) | 36,052 | 38.83% |
| Term Loans (Banks & FIs incl. WCDL) | 32,990 | 35.53% |
| External Commercial Borrowings (ECBs) | 8,939 | 9.63% |
| Commercial Papers | 3,413 | 3.68% |
| Subordinate & Perpetual Debts | 6,004 | 6.47% |
The company’s reliance on short-term borrowings remains limited, with CPs forming only 3.68% of total liabilities — a credit-positive indicator ahead of listing.
Risk Concentration Remains Controlled
| Metric | Value |
|---|---|
| Exposure to Top 10 Borrowings | ₹43,599 Cr (49.89%) |
| Exposure to 19 Key Counterparties | ₹57,608 Cr (62.05%) |
While the exposure to a few large funding counterparties is notable, HDB’s strong parental backing (as a subsidiary of HDFC Bank) and access to diverse market instruments offer risk mitigation.
Management Commentary
“The company actively monitors its asset-liability profile, maintaining a cushion of high-quality liquid assets and unutilized bank lines,” the disclosure states. It added that the Asset Liability Committee (ALCO) meets monthly to evaluate mismatches and funding positions.
IPO Context: Why This Matters
With its HDB IPO plans underway, HDB’s March quarter disclosures will likely be a key consideration for institutional investors conducting due diligence. A strong LCR of over 160% positions the company favorably against NBFC peers, showcasing preparedness to handle liquidity shocks — a crucial factor in volatile capital markets.
About the Company
HDB Financial Services Ltd, a subsidiary of HDFC Bank, is a non-deposit taking NBFC offering a mix of secured and unsecured loans, and BPO services. The company is set to launch its HDB IPO, marking a significant milestone in its growth journey.
REF: https://www.hdbfs.com/sites/default/files/reports/Disclosures_for_March_2025_17042025.pdf
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