HDB Financial Services Limited IPO

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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.

Objects of the HDB Financial Services Limited IPO:

The details of the proceeds from the Fresh Issue are summarized as: 1. Augmentation of the Company’s Tier – I Capital base to meet the Company’s future capital requirements including onward lending.
DRHP of HDB Financial Services Limited IPO
RHP of HDB Financial Services Limited IPO

HDB Financial Services Limited IPO Details:

Open Date: Jun 25 2025
Close Date: Jun 27 2025
Total Shares: 16,89,18,918
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Building
Issue Size: 12,500 Cr.
Lot Size: 20 Shares
Issue Price: ₹ 700-740 Per Equity Share
Listing At: NSE,BSE

Promoters And Management:

1. Arijit Basu is the Part- time Non-Executive Chairman of the Board and Independent Director of our Company. He holds a master’s degree in arts from the University of Delhi and has completed the course of Certified Associate of Indian Institute of Bankers. He has an experience of more than 40 years in the field of banking and financial services and was the managing director and whole-time director of State Bank of India (“SBI”). His career with the State Bank of India group spanned 37 years from December 1983 to October 2020. He was deputed by SBI as the managing director and chief executive officer of SBI Life Insurance Company Limited from July 2014 to March 2018. 2. Venkatraman Srinivasan is an Independent Director of our Company. He holds a bachelor’s degree in commerce from University of Bombay and is a fellow member of Institute of Chartered Accountants of India (“ICAI”). He has over 39 years of experience in the field of accounting. He was partner with M/s. V. Sankar Aiyar & Co., Chartered Accountants, since 1984 and retired from the firm in July 2024. He was appointed to our Board of Directors for a period of five years with effect from March 12, 2015, and reappointed as Independent Director with effect from March 12, 2020, for a second tenure of five years. 3. Smita Affinwalla is an Independent Director of our Company. She has completed her masters of management studies with a specialisation in finance from the Jamnalal Bajaj Institute of Management Studies. She has had a career of over 20 years divided between financial services and human resources. She is the founder and Managing Director of Illuminos Consulting Private Limited, a Human Resources Consulting firm. She has in the past been employed in various roles with companies such as Tata Finance Limited, Motilal Oswal Financial Services Limited and DDI India Private Limited. She was appointed to our Board of Directors with effect from March 12, 2015 and reappointed as Independent Director with effect from March 12, 2020.  

Financials of HDB Financial Services Limited IPO:

In Cr.
Particulars FY 2024-25 FY 2023-24  FY 2022-23
Net Interest Income 7,445.64 6,292.40 5415.86
Other Financial Charges 1,192.45 953.11 756.41
Net Total Income 8,693.47 7,357.25 6,257.03
PAT 2,175.92 2,460.84 1,959.35
PAT Growth -11.58% 25.59% 93.73%
Gross NPA 2.26% 1.90% 2.73%
Net NPA 0.99% 0.63% 0.95%
ROE 14.72% 19.55% 18.68%
ROA 2.16% 3.03% 2.97%
Debt to Equity Ratio 5.85 5.81 5.26

Comparison With Peers:

Companies Revenue (In Cr.) Net NPA D/E Ratio ROE ROA MCap (In Cr.) P/B Ratio P/E
HDB Financial Services  (FY 2025) 16300.28 0.99% 5.85 14.72% 2.16% 61,253.30 3.87 28.15
Bajaj Finance (FY 2025) 69,684 0.44 3.74 19.20% 3.99% 5,71,714 5.92 34.40
Sundaram Finance (FY 2025) 8,486 1.25% (FY24) 4.63 9.69% 2.69% 54,341 4.11 28.90
L&T Finance (FY 2025) 15,924  3.61 10.80% 2.37% 50,247 Cr. 1.99 19
Mahindra & Mahindra Financial Services (FY 2025) 18,463 5.53 10.90% 1.69% 37,182 1.72 16.40
Cholamandalam Investment and Finance Company (FY 2025) 25,846  2.63% 7.40 19.70% 2.38% 1,35,434 5.72 31.80
Shriram Finance (FY 2025) 41,834 2.64% 4.15 15.80% 3.07% 1,27,133 2.23 15.30

Recommendation on HDB Financial Services Limited IPO:

Review and Recommendation of HDB Financial Services IPO by team IZ is 5/10.

Lead Manager of HDB Financial Services Limited IPO:

  1. BNP Paribas
  2. BofA Securities India Limited
  3. Goldman Sachs (India) Securities Private Limited
  4. HSBC Securities & Capital Markets Private Limited
  5. IIFL Holdings Limited
  6. Jefferies India Private Limited
  7. JM Financial Consultants Private Limited
  8. Morgan Stanley India Company Private Limited
  9. Motilal Oswal Investments Advisors Private Limited
  10. Nomura Financial Advisory And Securities (India) Private Limited
  11. Nuvama Wealth Management Limited
  12. UBS Securities India Private Limited

Registrar of HDB Financial Services Limited IPO:

  1. Link Intime India Private Limited

Discussion on HDB Financial Services Limited IPO:

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