HDB Financial Services IPO

About HDB Financial Services IPO

The IPO of HDB Financial Services Ltd is a 100% book-built issue. It comprises a fresh issue and an offer for sale. The fresh issue aggregates up to ₹2500 crore, while the offer for sale aggregates up to ₹10,000 crore. The lot size is 20 and the price band is ₹700 to ₹740.

The IPO opens on June 25, 2025 and closes on June 27, 2025. The allotment date is June 30, 2025. The initiation of refunds will take place on July 1, 2025. The listing date will be July 2, 2025. The credit of shares to the demat account will take place on July 1, 2025.

Objectives of HDB Financial Services IPO

The company proposes to utilise the net proceeds from the Fresh Issue towards augmenting its Tier – I Capital base to meet the company’s future capital requirements including onward lending, arising out of the growth of its business. Further, a portion of the proceeds from the fresh issue will be used towards meeting offer expenses.

Industry Outlook

NBFCs have shown remarkable resilience and gained importance in the financial sector ecosystem, growing from less than ₹2 trillion AUM at the turn of the century to ₹41 trillion at the end of Fiscal 2024. During Fiscals 2019 to 2024, NBFC credit is estimated to have witnessed a growth at a CAGR of 11%.

Rapid revival in the economy is expected to drive consumer demand in Fiscal 2025, leading to healthy growth in NBFCs. Going forward, CRISIL MI&A expects NBFC credit to grow at 15-17% between Fiscal 2024 and Fiscal 2027 driven by growth in the retail segment, and MSME loans in the wholesale segment.

Company Information

HDB Financial Services Ltd is India’s second largest and third fastest growing customer franchise amongst its NBFC peers (for which data is available), according to the CRISIL Report. It has served 19.2 million customers as at March 31, 2025, which grew at a CAGR of 25.45% between March 31, 2023 and March 31, 2025. It primarily caters to underserved and underbanked customers in low to middle-income households with minimal or no credit history.

Risks of HDB Financial Services IPO

• Significant Reduce in Ownership

The company’s promoter may be required to significantly reduce its ownership in the Company, i.e., less than 20% (or any such higher percentage with prior RBI approval) on account of overlapping business with its Promoter and one of the members of its Promoter Group if the draft circular issued by the RBI on October 4, 2024 is implemented in its current form, which may have a material adverse impact on the company’s business operations, financial position and share price.

• Non-payment or Customer Default

The company’s Gross Stage 3 Loans amounted to 2.26% of Total Gross Loans as at March 31, 2025, which was an increase from 1.90% as at March 31, 2024. Non-payment or default by its customers, its inability to provide adequate provisioning coverage for non-performing assets or change in regulatorily mandated provisioning requirements may adversely affect its financial condition and results of operations.

• Unsecured Loan Portfolio

As at March 31, 2025, unsecured loans comprised 26.99% of the company’s total gross loans, which is a decrease from 28.66% as at March 31, 2024. Its unsecured loan portfolio is not supported by any collateral that could help ensure repayment of the loan, and in the event of non-payment by a borrower of one of these loans, it may be unable to collect the unpaid balance.

Anchor Investor Bidding Date

The anchor portion of the IPO will open for bidding on June 24, 2025.

IPO Registrar and Book Running Lead Managers

Link Intime India Pvt Ltd is the registrar of HDB Financial Services Ltd. The book running lead managers are:

• JM Financial Ltd
  
• BNP Paribas
  
• BofA Securities India Limited
  
• Goldman Sachs (India) Securities Private Ltd
  
• HSBC Securities and Capital Markets (India) Private Ltd
  
• IIFL Securities Ltd
  
• Jefferies India Private Ltd
  
• Morgan Stanley India Company Private Ltd
  
• Motilal Oswal Investment Advisors Ltd
  
• Nomura Financial Advisory and Securities (India) Private Ltd
  
• Nuvama Wealth Management Ltd
  
• UBS Securities India Private Ltd
  

Business Model

HDB Financial Services Ltd’s is a diversified NBFC, with a goal of having an optimal mix across products, while maintaining a balanced approach to secured and unsecured loans in its loan book. Secured loans represented 73.01% of its total gross loans and unsecured loans represented 26.99% of its total gross loans as of March 31, 2025. Its diversified product portfolio serves multiple credit needs of customers across three business verticals – enterprise lending, asset finance and consumer finance.

The company also offers business process outsourcing (BPO) services to its promoter and fee-based products such as distribution of insurance products primarily to its lending customers.

Company Growth Trajectory

The revenue from operations of HDB Financial Services Ltd grew from ₹ 12402.88 crores in FY 23 to ₹16300.28 crores in FY 25. Its customer count increased from 1.22 crores in FY 23 to 1.92 crores in FY 25, while its number of branches grew from 1492 in FY 23 to 1771 in FY 25. Total gross loan growth on a y-o-y basis increased from 14.19% in FY 23 to 18.47% in FY 25.

Diversified product portfolio, comprehensive systems and processes and advanced technology tools driving customer experience and efficiency have contributed to the company's growth over the years.

Market Position

HDB Financial Services is the seventh largest leading, diversified retail-focused non-banking financial company (“NBFC”) in India in terms of the size of Total Gross Loan book at ₹902.2 billion as at March 31, 2024, amongst its NBFC peers, according to the CRISIL Report.

It’s India’s second largest and third fastest growing customer franchise amongst its NBFC peers (for which data is available), according to the CRISIL Report, and has served 19.2 million customers as at March 31, 2025, which grew at a CAGR of 25.45% between March 31, 2023 and March 31, 2025. As at March 31, 2025, over 80% of its branches are located outside India’s 20 largest cities by population (based on the 2011 census report) and over 70% are located in Tier 4+ towns.

How to Check Allotment Status of HDB Financial Services IPO?

1. Visit the Registrar’s Website

• Visit the official website of MUFG Intime India Pvt Ltd
• Click on ‘Public Issues’ under ‘Investor Services’
• Select company name and enter either your PAN, application number, DP/Client ID or account number/IFSC
• Click on ‘Submit’ to know the status

2. Check on the Bombay Stock Exchange Website

The Bombay Stock Exchange (BSE) also has an IPO allotment status page. Go to www.bseindia.com and find the 'Investor Services' tab. Under 'Investors Services', click on 'Status of Issue Application'. This will take you to the IPO allotment status page. On the BSE IPO page, follow these steps:

• Choose the Issue Type
• Select the Issue Name from dropdown
• Put in either your application number or PAN number
• Check the box ‘I’m not a robot’
• Click on ‘Search’ to know allotment status

3. Check on the National Stock Exchange Website

The National Stock Exchange (NSE) has an IPO Bid Verification module. You can use it to check the status of HDB Financial Services Ltd. Go to www.nseindia.com and find the 'Invest' tab. Click on 'Verify IPO Bids' under 'Resources & Tools'.

On the NSE IPO Bid Verification page, enter:

• Company name from dropdown
• Application number
• PAN

Then click 'Submit' to know the allotment status.

How to Apply for HDB Financial Services IPO?

To apply for this IPO:

• Step 1: Log in to your Kotak Neo Demat account: Log in to your Demat account to access IPO investments. Next, select the current IPO section.
• Step 2: Specify IPO details: Enter the number of lots and the price you wish to apply for.
• Step 3: Enter UPI ID After entering your UPI ID, click submit. This will place your bid with the exchange.
• Step 4: Mandate Notification: Your UPI app will receive a mandate notification to block funds.
• Step 5: Approve Request Your funds will be blocked once you approve the mandate request on your UPI.