HDB Financial Services IPO: HDFC Bank Unit To File For IPO With Rs 2,500 Crore Fresh Issue

HDB Financial Services Ltd. said on Friday that it is seeking to raise over Rs 2,500 crore via an initial public offering. The issue is subject to approval from shareholders, market conditions, receipt of applicable approvals, regulatory clearances and other considerations.

The public offer will include a fresh issue of shares worth Rs 2,500 crore, according to an exchange filing by the parent firm HDFC Bank Ltd. It will also include an offer for sale of equities by existing and eligible shareholders who may offer to tender their shares.

This follows the approval from the board of directors of HDFC Bank Ltd. in July 2024. HDFC Bank owns a majority stake in the non-banking financial company. As of June 30, the lender held a 94.6% stake in the NBFC.

HDB Financial is issuing the IPO to meet the mandatory requirement of being listed by September 2025, according to a circular from the Reserve Bank of India in October 2022. As of September 2023, the central bank had a list of 15 upper layer NBFCs, where unlisted companies were required to be listed within three years under new regulations. Other unlisted lenders in the list include Tata Capital Financial Services and Piramal Capital & Housing Finance.

Bajaj Housing Finance listed this week after conducting an initial public offering last week.

The board of directors of HDB Financial, in a meeting on Friday, also approved the amendment to the articles of association of the company and the amendment to the employee stock option schemes in order to comply with regulatory requirements.

HDB Financial Services is accredited with CARE AAA and CRISIL AAA ratings for its long-term debt and bank facilities and an A1+ rating for its short-term debt and commercial papers.

The company had a loan book of Rs 95,600 crore, up 30% year-on-year. Stage 3 loans were at 1.93% of gross loans. As of June 30, the total capital adequacy ratio was 18.8% with a Tier-I ratio of 14%, according to HDFC Bank disclosures. The company reported a net profit of Rs 580 crore in the first quarter.