HDFC arm, HDB Financial Services soon to get list for IPO

New Delhi: HDB Financial Services, a subsidiary of HDFC Bank, is finally moving forward with its long-awaited initial public offering (IPO). HDFC Bank has asked top investment banks to provide bids and valuation estimates for the proposed IPO of HDB Financial Services.

The initial public offering (IPO) of HDB Financial Services is expected to have a value between $9 billion to $12 billion (Rs 75,000 crore to Rs 1 lakh crore), depending on market conditions. The bank, which currently owns almost 95% of HDB, may sell a 10% stake in the IPO, raising approximately Rs 7,500 crore to Rs 10,000 crore.

In addition, HDFC Bank may also consider a pre-IPO share placement with investors. Currently, HDB Financial Services is valued at approximately $7.9 billion (Rs 65,690 crore), with its unlisted shares priced at Rs 830 each. Upon listing, the company will be one of the largest listed finance companies in terms of market capitalization.

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The IPO is expected to be launched in either the third quarter or the last quarter of FY25. The bank needs to complete HDB's IPO as the company has to be listed before September 2025 to comply with Reserve Bank of India (RBI) norms. The RBI had in September 2023 mandated that non-banking finance companies (NBFCs) classified as part of the 'upper layer' have to be listed within two years.

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HDB Financial Services is a Non-Banking Finance Company (NBFC) that was incorporated on June 4, 2007. The company provides financing to individual borrowers and medium, small, and micro business enterprises. Additionally, HDB, which is a subsidiary of HDFC Bank, also operates a BPO business and provides services to HDFC Bank, including running collections call centers and collecting overdue payments from borrowers.

HDB's upcoming IPO will be the first issue by the combined entity of HDFC and HDFC Bank. Before the merger, the last subsidiaries to be listed were HDFC Asset Management Company and HDFC Life, both of which belonged to the erstwhile.

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