HDB Financial Services to launch ₹12,500cr IPO in July
What's the story
HDB Financial Services, the non-banking financial company (NBFC) of HDFC Bank, is preparing to launch a ₹12,500 crore initial public offering (IPO) by mid-July, according to Moneycontrol. The move would make it the biggest IPO of 2025 so far, surpassing Hexaware Technologies's ₹8,750 crore offer in February. The company is currently working on its updated draft red herring prospectus (UDRHP), a precursor document to filing the final one before launching an initial share sale.
Market strategy
UDRHP expected by end of this month
The UDRHP is expected to be filed by the end of this month, with an early to mid-July launch date in mind. This would depend on market stability. Once approved, the company will file a red herring prospectus (RHP) with the Securities and Exchange Board of India (SEBI) and the Registrar of Companies, after which the IPO can be launched. HDB Financial Services's move comes as a sign of renewed investor interest in India's primary market.
Company profile
Focus on underbanked customer segments
Founded in 2007, HDB Financial Services offers a variety of loans to individuals and businesses across India. The company operates through three main verticals: enterprise lending, asset finance, and consumer finance. It specializes in secured/unsecured loans, consumer loans, and property-backed loans with a strong focus on underbanked customer segments. The IPO is mainly driven by the Reserve Bank of India (RBI)'s 2022 regulation requiring large NBFCs to list on the stock exchange by September 2025.
Financials
Gross loan book and profits
As of September 30, 2024, HDB Financial Services' gross loan book stood at ₹98,620 crore. The company posted a profit of ₹2,460 crore in FY24. This reflects a compound annual growth rate (CAGR) of 20.93% between March 31, 2022, and September 30, 202,4 for the gross loan book and a whopping CAGR of 55.9% between FY22 and FY24 for profits.