The HDB Financial IPO has created a lot of buzz in India’s IPO market, and for good reasons too. It’s a massive IPO of ₹12,500 crore and backed by none other than the mighty HDFC Bank. It is not only the most anticipated IPO this year, but also a significant event in the NBFC (Non-Banking Financial Company) space. The IPO opens for subscription on June 25 and closes on June 27.
But is this IPO worth considering? Let’s break it down.
About the Company
HDB Financial Services Limited is a well-established player in the NBFC sector. The company, a subsidiary of HDFC Bank (approximately 94 % stake pre-IPO), one of the largest private-sector banks in India, began its journey in the year 2007. Over the years, the company has carved a strong presence in the retail-lending space with a diversified product mix.
As of March 31, 2025, the company boasts a gross loan book of ₹1,068.8 billion. It operates across three verticals.
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Enterprise Lending – Loans against property, business loans, and personal loans for salaried individuals
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Asset Finance – Loans for commercial vehicles, construction equipment, and tractors
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Consumer Finance – Auto loans, lifestyle product financing.
In addition, the company also operates a BPO service.
With more than ₹1 trillion assets under management, this is not just any other NBFC, but is among the top 7 NBFCs in India.
Sector Overview
HDB Financials IPO Details
| IPO Name | HDB Financials |
| IPO Open and Close Date | June 25, 2025 to June 27, 2025 |
| Issue Price Band | ₹700 to ₹740 per share |
| Lot Size | 20 shares per lot |
| Listing At | NSE & BSE |
| Issue Size | ₹12,500.00 crores |
| Issue Type | OFS & Fresh Issue |
| Allotment Date | June 30, 2025 |
| Listing Date | July 02, 2025 |
| Retail Investors Minimum Lot & Amount | 1 Lot & ₹14,800 |
| Retail Investors Maximum Lot & Amount | 13 Lots & ₹1,92,400 |
| Small HNIs Minimum Lot & Amount | 14 Lots & ₹2,07,200 |
| Small HNIs Maximum Lot & Amount | 67 Lots & ₹9,91,600 |
| Big HNIs Minimum Lot & Amount | 68 Lots & ₹10,06,400 |
Objects of the Issue
The IPO is a mix of a Fresh Issue (₹2,500 crore) and an Offer for Sale (₹10,000 crore) by HDFC Bank.
So, what will the company do with the fresh funds from the Issue?
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To augment its capital base for future lending activities
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To maintain capital adequacy, as required by the RBI’s regulatory framework
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General corporate purposes
Financials at a Glance
| Particulars | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue from Operations (₹ Cr) | 12,402.9 | 14,171.1 | 16,300.3 |
| Net Profit (₹ Cr) | 1,959.3 | 2,460.8 | 2,175.9 |
| Total Assets (₹ Cr) | 70,050.4 | 92,556.5 | 108,663.2 |
| EBITDA (₹ Cr) | 6,251.2 | 8,314.1 | 9,512.3 |
Few Observations:
- CAGR has grown at ~14.7% from FY23 to FY25.
- Net profit fell in FY25
- There has been aggressive lending growth Year-on-Year
Key Ratios
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| EPS (₹) – Basic | 24.78 | 31.08 | 27.40 |
| RoE (%) | 18.68% | 19.55% | 14.72% |
| Net Asset Value (₹) | 144.5 | 173.3 | 198.8 |
Few Observations
- EPS remains healthy despite a dip in FY25
- RoE declined in FY25, possibly due to a drop in profitability
- A steady rise in Net Asset Value is a positive signal for long-term investors
Inferences Based on Financials & Ratios
Consistent Growth: The company’s revenue has grown consistently over the past 3 years. The CAGR has increased by 23.5% from FY23 to FY25.
Dip in Return-on-Equity: FY25 saw a slight dip in the ratio; this could be temporary, possibly due to provisioning(more money set aside) or a larger asset base ahead of the IPO.
Strong Promoter Backing: Being part of the HDFC group gives it a significant advantage in terms of branding, trust, and financial backing.
Sector Tailwinds: The NBFC sector is on an upswing, and HDB is in a sweet spot due to its retail focus, tech-enabled, and being widely spread.
Conclusion: Should You Subscribe?
To start, HDB is not just any other NBFC; it’s an extension of HDFC’s legacy, now ready to stand on its own in the capital markets.
Why you should consider it:
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Strong fundamentals and asset growth
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Trusted promoter (HDFC Bank)
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A focused business model with diversified offerings
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Widely spread, ready to tap the large market in Tier 2/3 cities
Points to watch:
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Short-term dip in profit and RoE
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Highly competitive NBFC space
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Regulatory tightening could affect lending strategies
Final Verdict – HDB Financial IPO
Let us understand with a cricketing analogy, if you are looking for a T-20 star cricketer in HDB, then you will meet with disappointment, but if you love the patience and gruelling of Test cricket, then HDB is a compelling bet. But as always, do your research, read the RHP, and take an informed decision.
