HDB Financial's shares up 14% this week: Should you invest?
What's the story
HDB Financial's share price has seen a strong performance in its initial public offering (IPO) week, giving investors a solid return of 14% in just three sessions. The company's stocks debuted at ₹835 on both the BSE and NSE, a premium of 12.8% over the IPO issue price of ₹740. Since then, it has gained further to settle over 13% above the IPO price.
Market analysis
HDB Financial shares have remained above issue price
The highest and lowest points for HDB Financial shares during this period were ₹891.65 and ₹827.50, respectively, both remaining above the issue price. On its listing day, July 2, Emkay Global initiated coverage on the HDFC Bank subsidiary with a 'Buy' rating and a target price of ₹900 per share by June 2026. This indicates another potential upside of 7% in HDB Financial's share price from current levels.
Growth drivers
Stock has long-term growth potential
Vinit Boljinkar, the Head of Research at Ventura Securities, believes the momentum in HDB Financial Services stock could continue to thrive in the long term. He cites three reasons: its position as India's fourth largest retail-focused NBFC with a strong customer base of 1.9 crore, and healthy loan book growth (23.5% CAGR over two years) and secured loans (73%). Parent company HDFC Bank's brand recognition and distribution network were also considered.
Investor advice
Retail investors should adopt 'HOLD' strategy
Vinit Bolinjkar has suggested a 'HOLD' strategy for retail investors looking at long-term gains in HDB Financial shares. He believes the company's strong retail market position, production diversification, and valuation advantage justify this view.