HDB Financial Services Set to Launch Rs.12,500 Crore IPO by June-End Valuation Seen at ₹62,000 Crore

HDB Financial Services, the non-banking financial arm of HDFC Bank, is preparing to roll out its highly anticipated ₹12,500-crore initial public offering (IPO) by the end of June 2025, in what could become India’s largest-ever NBFC IPO. The offering includes a fresh issue of ₹2,500 crore and an offer for sale (OFS) of ₹10,000 crore by parent HDFC Bank, which currently owns 94.3% stake in the company. At the top end of the expected price band, HDB is targeting a post-money valuation of approximately ₹62,000 crore (around $7.2 billion), according to sources familiar with the matter.

Highlights:

• HDB Financial Services plans ₹12,500-crore IPO with June-end target.

• Offering includes ₹2,500 crore fresh issue and ₹10,000 crore OFS by HDFC Bank.

• Target valuation: ₹62,000 crore ($7.2 billion).

• Would be the largest IPO by an NBFC in Indian market history.

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IPO Launch Timeline and Regulatory Context

The IPO process is progressing swiftly following the filing of the Updated Draft Red Herring Prospectus (UDRHP). Sources indicate that the Red Herring Prospectus (RHP) is expected to be filed shortly, with the anchor investor allotment scheduled for June 24, and public subscription likely between June 25 and June 27. However, these timelines are subject to market conditions and could shift in case of unexpected events.

This listing is not merely strategic, but regulatory in nature. In October 2022, the Reserve Bank of India (RBI) categorized HDB Financial as an “Upper Layer” NBFC, triggering a mandatory listing requirement within three years — by September 2025. HDFC Bank had already provided in-principle board approval for listing the unit in July 2024, forming a dedicated committee to oversee the IPO process.

Highlights:

• Anchor portion planned for June 24; public issue window: June 25–27.

• Mandatory listing deadline: September 2025 as per RBI norms.

• Regulatory push drives IPO timeline for all “Upper Layer” NBFCs.

• IPO process managed through 12-member syndicate of global investment banks.

Strategic Objectives Behind the IPO

The proceeds from the fresh issue, amounting to ₹2,500 crore, will primarily be used for augmenting Tier-1 capital to support future growth, capital adequacy, and onward lending. This capital infusion will enable HDB Financial to expand its balance sheet and maintain adequate buffers in line with RBI’s evolving prudential norms for systemically important NBFCs.

For parent HDFC Bank, the IPO and subsequent partial stake sale via OFS will help unlock value from its non-bank subsidiary while still retaining majority control. The move aligns with HDFC Bank’s broader strategy of capital efficiency and focusing on its core banking franchise, even as it supports the long-term growth of its NBFC unit.

Highlights:

• ₹2,500 crore fresh issue to bolster Tier-1 capital reserves.

• Onward lending and capital adequacy cited as primary usage of funds.

• ₹10,000 crore OFS to reduce HDFC Bank’s holding, while unlocking shareholder value.

• Strategic capital recycling initiative ahead of FY26 regulatory deadline.

Mega IPO Backed by Leading Global and Domestic Investment Banks

In terms of execution, HDB Financial’s IPO is being handled by a 12-member syndicate of marquee investment banks. The lead managers include:

• JM Financial

• BNP Paribas

• BofA Securities

• Jefferies

• Goldman Sachs

• HSBC Securities

• Nomura

• IIFL Securities

• Morgan Stanley

• Nuvama

• Motilal Oswal

• UBS

Cyril Amarchand Mangaldas has been appointed as legal counsel for the company. According to market insiders, roadshows with institutional investors are already underway, and early feedback suggests healthy demand due to the firm’s pedigree, loan book quality, and profitable growth track record.

Highlights:

• IPO managed by 12 top global and Indian investment banks.

• Strong institutional interest expected due to brand, performance, and governance.

• Legal advisor: Cyril Amarchand Mangaldas.

• HDB Financial’s IPO could set benchmarks for future NBFC listings.

HDB Financial’s Market Position and Growth Outlook

As a key NBFC subsidiary of HDFC Bank, HDB Financial provides secured and unsecured loans to retail and MSME customers. It operates a diversified loan book with strong risk management practices and consistently profitable operations. The upcoming IPO marks a critical milestone in the company’s evolution from a private lending arm into a publicly listed financial institution with greater autonomy and visibility.

In the context of RBI’s tightened regulatory oversight over large NBFCs, HDB’s listing also enhances transparency, capital access, and governance expectations, aligning it more closely with listed financial peers like Bajaj Finance and Shriram Finance. Market analysts expect the IPO to re-rate the NBFC sector and attract significant interest from mutual funds, foreign portfolio investors, and retail investors.

Highlights:

• HDB Financial is a key retail and MSME-focused NBFC under HDFC Bank.

• Strong loan book diversification and sustained profitability.

• Listing brings transparency, autonomy, and valuation benchmarking.

• Sector analysts see this as a bellwether IPO for NBFCs post-RBI norms.

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