HDB Financial’s ₹12,500 Crore IPO Opens — Should You Invest?
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Summary: HDB Financial, a key arm of HDFC Bank, launched India’s biggest NBFC IPO today, aiming to raise ₹12,500 crore. With anchor backing from big names like LIC and BlackRock, retail investors are now weighing in.
HDB Financial Services, a branch of HDFC Bank, started its much-anticipated initial public offering (IPO) on June 25. The company wants to raise ₹12,5 crore, which would make it the biggest IPO by an Indian non-banking financial company (NBFC).
The issue includes a fresh equity offering worth ₹2,500 crore and an offer-for-sale of ₹10,000 crore. The IPO will be accessible for subscriptions until June 27, with the listing scheduled in the first week of July.
Before its public debut, the IPO drew significant institutional interest. Anchor investors, including BlackRock, LIC, and Norway's sovereign wealth fund, invested ₹3,369 crore at the upper price band of ₹740 per share, exhibiting strong confidence.
The IPO is selling at a premium of ₹74–75 in the unofficial gray market, indicating a potential listing gain of 10%. Despite the initial lackluster retail subscription, the IPO has been rated as "Subscribe" by a number of brokerages, including SBI Securities, Bajaj Broking, and Sharekhan.
They cite HDB's high brand recognition, constant asset quality, and conservative pricing as benefits over competitors like Bajaj Finance and Shriram Finance.
The firm specializes in lending to rural and semi-urban customers, with a loan book of ₹1.18 lakh crore and a low net non-performing asset ratio of 2.2%.
Experts warn that large initial public offerings (IPOs) may underperform after listing, and that an oversupplied NBFC market may eventually reduce profitability.
Should You Subscribe?
If you're a long-term investor looking for exposure to India's growing consumer finance business, HDB Financial's IPO looks promising, especially given its strong parentage and low costs.
However, short-term investors who rely primarily on listing gains should exercise caution, since actual performance may vary despite the grey market excitement.
