HDB Financial Services IPO: Complete Guide on Issue Size, Business Model, Fund Utilization, GMP & Impact on HDFC Bank

Explore the detailed overview of HDB Financial Services' IPO, including issue size, price band, business model, fund utilization, lot size, key dates, GMP, and its strategic impact on HDFC Bank.

IPO Overview

HDB Financial Services is coming up with a much-anticipated Initial Public Offering (IPO) valued at 12,500 crore. The offering includes a fresh issue of 2,500 crore and an offer for sale (OFS) worth 10,000 crore.

IPO Price Band: 700 to 740 per share
Lot Size: 20 shares (Minimum application amount is 14,800)
Listing Schedule:
- Subscription window: June 25 to June 27
- Allotment: June 30
- Listing: July 2

Promoters and Shareholding

HDFC Bank is the parent promoter, holding approximately 94.3 percent stake pre-IPO. Post-issue, its holding will reduce to around 74.2 percent. The IPO aligns with Reserve Bank of India norms for NBFCs to dilute their holdings and list publicly.

The anchor investors’ portion raised 3,369 crore at the upper band of 740 per share. Notable names include large domestic mutual funds, sovereign wealth funds, and foreign portfolio investors.

Business Model

HDB Financial Services is a non-banking financial company (NBFC) offering a wide suite of secured and unsecured loans. Its operations are primarily divided into three segments:

Enterprise Lending
- MSME loans and commercial finance
- Accounts for about 40 percent of the loan book
Asset Finance
- Loans against vehicles and equipment
- Represents nearly 37 percent
Consumer Loans
- Personal, gold, and unsecured loans
- Comprises the remaining 23 percent

With a strong network of over 1,770 branches, HDB Financial has demonstrated a compound annual growth rate of over 23 percent in the last three years. The latest annual profit after tax is approximately 2,176 crore, with gross non-performing assets (GNPA) at a healthy 2.49 percent.

Use of Funds

The fresh issue of 2,500 crore will primarily be used to:

Strengthen Tier-I capital
Support future lending expansion
Ensure compliance with the RBI’s regulatory capital adequacy

The OFS portion will be monetized by HDFC Bank, allowing broader retail and institutional participation and reducing promoter holding.

Impact on HDFC Bank

HDFC Bank will continue to retain a majority stake but will benefit from this dilution by unlocking value and meeting regulatory norms. It will also support HDFC Bank’s capital adequacy by freeing up over 10,000 crore, without impacting its control over HDB Financial.

From a valuation perspective, the IPO is likely to have a favorable impact on HDFC Bank's overall performance, which could enhance market sentiment and attract institutional interest.

Grey Market Premium (GMP)

HDB Financial’s shares have been commanding a healthy premium in the grey market.

Initial GMP: 74 to 75 over issue price
Recent GMP: Slight dip to 50 to 51

The demand remains robust, though the slight correction signals realistic valuation expectations closer to listing.

Important Dates (Tentative)

Event	Date
IPO Opens	June 25
IPO Closes	June 27
Anchor Allocation	June 24
Basis of Allotment	June 30
Refunds Initiated	July 1
Listing on the Stock Market	July 2

Analyst View and Outlook

Brokerages and analysts are bullish on HDB Financial’s listing, considering its strong parentage, rapid growth in asset book, and diversified business model. With RoE around 15 percent and P/B in the range of 3.2 to 3.5 post-money, the valuation is seen as fair.

However, its debt-to-equity ratio remains high at approximately 5.85x, which could raise concerns in a high-interest environment. Investors should be mindful of macroeconomic risks affecting the NBFC sector.

Conclusion

HDB Financial’s IPO represents a strategic milestone both for the company and parent HDFC Bank. The issue is well-structured with a healthy mix of growth potential and regulatory alignment. With strong anchor support and steady GMP, investor sentiment remains positive. However, investors are advised to evaluate fundamentals alongside market conditions before subscribing.

Author's Note

This blog aims to deliver a clear and human-focused breakdown of HDB Financial Services' IPO. As India’s financial markets mature, opportunities like this provide retail and institutional investors a valuable entry into well-regulated, high-growth NBFC spaces.

The IPO is more than a fundraise — it’s a strategic unlocking of value by one of India’s most trusted banking groups. I hope this blog empowers you to make an informed and balanced investment decision.

The Financial And Tech Literacy