The much-anticipated initial public offering (IPO) of HDB Financial Services, a key subsidiary of HDFC Bank, opened for subscription today, aiming to raise a substantial ₹12,500 crore from the primary market. With a legacy tied to India’s most trusted private sector bank, all eyes are on whether HDB can defy the long-standing trend of underwhelming mega IPOs.
IPO Details: Price Band and Structure
The HDB Financial Services IPO price band has been set at ₹700 to ₹740 per equity share. The issue will remain open for subscription until June 27, 2025, and is proposed to be listed on both the BSE and NSE.
Out of the total issue size:
- ₹2,500 crore will be raised through fresh issuance of shares
- ₹10,000 crore is allocated towards the Offer for Sale (OFS) by existing shareholders
This capital raise is expected to support business expansion and improve the company’s balance sheet strength, while also offering partial exits to current stakeholders.
Strong Parentage, Stronger Expectations
HDB Financial Services is a non-banking financial company (NBFC) and a wholly-owned subsidiary of HDFC Bank, India’s largest private lender by market cap. Over the years, HDB has built a diversified loan book across segments such as personal loans, business loans, gold loans, and asset finance.
Despite the track record, investors remain cautious. Historically, mega IPOs (above ₹10,000 crore) have not lived up to the market hype in the long term. Listings like LIC, Paytm, and Coal India, though massive, have seen muted returns post-debut, creating a “mega IPO jinx” narrative in the Indian stock market.
Grey Market Premium Signals Early Optimism
Market participants have already started speculating on the IPO’s prospects, with grey market premiums (GMP) reflecting early investor sentiment. As of today, HDB Financial Services shares are commanding a GMP of ₹75, indicating moderate bullishness ahead of its official debut.
However, experts caution retail investors to weigh fundamentals over short-term GMPs and hype, especially given the mixed past performance of large-cap IPOs.
Should You Invest? Key Considerations
Here are a few factors to consider before applying:
- Strong Promoter Backing: HDFC Bank’s proven track record may instill investor confidence.
- Diverse Lending Portfolio: HDB’s NBFC model caters to both salaried and self-employed segments.
- Valuation Check: The pricing appears conservative relative to peers, but investor sentiment remains crucial.
- Past Mega IPO Performance: Historical patterns suggest caution despite initial buzz.
Disclaimer:- This article is for informational purposes only and does not constitute financial advice. Readers are advised to consult a certified financial advisor before making any investment decisions. Investing in IPOs is subject to market risks.