1. Introduction of the Company

HDB Financial Services Ltd (HDBFS) is a leading non-banking financial company (NBFC) in India, incorporated in 2007. It is a subsidiary of HDFC Bank, which holds ~94.6% stake as of March 2025. The company is classified as an NBFC–Upper Layer (NBFC-UL) by the Reserve Bank of India, meaning it falls under stricter regulatory oversight due to its size and systemic importance.

HDBFS caters to a diverse base of retail and MSME customers across India through its extensive branch network, offering both lending and non-lending services.

2. Business Model and Services Provided

HDBFS operates a retail and MSME-focused lending model. The core revenue is generated from interest income on its diversified loan book. It follows a secured-plus-unsecured lending approach, with increasing emphasis on digitization and granular risk management.

3. Key Business Segments:

A. Lending Services

i)Personal Loans – For salaried and self-employed individuals.
ii)Business Loans – Short-term and working capital loans for MSMEs.
iii) Loan Against Property (LAP) – Secured loans for individuals and SMEs.
iv) Auto & Commercial Vehicle Loans – Including tractors, trucks, and construction equipment.
v) Gold Loans – Loans against gold jewelry.
vi) Consumer Durable Loans – Electronics, appliances, smartphones, etc.
vii) Digital Loans – App-based lending for pre-approved customers.

B. Fee-Based and Non-Fund Services

• BPO Services – HDBFS provides document management, KYC processing, customer verification, and collection services to third-party clients including banks and insurance companies.

4. Credit Ratings

As of FY 2024–25, HDB Financial Services holds top-tier credit ratings from leading agencies, reflecting its strong parentage, governance, and financial strength:

– CRISIL: AAA / Stable (Long Term), A1+ (Short Term)
– CARE: AAA / Stable
–ICRA: AAA / Stable

These ratings highlight the company’s low credit risk, strong liquidity, and reliable capital support from HDFC Bank.

5. Distribution and Geographic Reach

HDBFS has built a deep and wide distribution network to serve both urban and rural India:

• Branches: ~1,700 across 22+ states and 3–4 Union Territories.

• Cities Covered: ~1,000+ towns and cities as of March 2025.

• Digital Channels: Offers app-based loan applications, WhatsApp banking, and pre-approved offers via HDFC ecosystem.

This pan-India presence allows HDBFS to maintain a diversified customer base with no over-reliance on any single region (no state contributes more than 35% of AUM).

6. Customer Segments

HDB Financial primarily serves:

• Retail Consumers: For personal finance, gold, and consumer durable loans.

• Small Businesses & MSMEs: Working capital loans, LAP, commercial vehicle loans.

• Self-Employed Professionals: Loans for business expansion, property purchase, or vehicle financing.

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