HDB Financial's ₹12,500cr IPO receives bids worth ₹1.6L crore
What's the story
HDB Financial Services's ₹12,500 crore initial public offering (IPO) has received bids worth a whopping ₹1.6 lakh crore by the end of Friday. The massive response is mainly from institutional buyers, making it India's largest offering so far this year. The strong demand indicates a revival of confidence in the Indian stock market after a period of uncertainty due to global trade tensions.
Market response
Nifty 50 index rebounds
The blue-chip Nifty 50 index, which had hit a one-year low in April, is now just 2.4% away from last year's record highs. The recovery is fueled by easing geopolitical tensions and trade fears, leading to a risk-on sentiment among investors. HDB Financial's IPO has been subscribed 16.7 times over, with institutional buyers like foreign investors and mutual funds bidding for 55 times their reserved portion of shares.
Investor participation
Non-institutional investors also showed strong interest
Non-institutional investors also showed strong interest, bidding for 10 times their portion. However, retail investor interest was comparatively muted, with their shares being oversubscribed just 1.4 times. The strong response makes HDB Financial's IPO the most subscribed offering over $1 billion since Zomato's in 2021, according to Prime Database data.
Historical significance
HDB's IPO is 1 of 6 this week
HDB Financial's IPO, the largest ever by an Indian non-bank lender, was one of six offerings this week. Out of these, five were oversubscribed between 2-86 times. Earlier this week, Credila Financial Services and Pine Labs filed for their respective IPOs. HDFC Bank, which owns a 94% stake in HDB, sold shares worth up to ₹10,000 crore, while HDB issued fresh shares worth ₹2,500 crore.