HDB Financial Services – one of the leading, diversified retail-focused non-banking financial companies (NBFCs) in India – has filed Draft Red Herring Prospectus (DRHP) with SEBI for an Initial Public Offering (IPO). HDB Financial Services IPO has been keenly awaited in the market as it is a subsidiary of HDFC Bank and includes shareholder reservation.
HDB Financial Services offers a large portfolio of lending products that caters to a growing and diverse customer base through a wide omni-channel distribution network. The lending products are offered through three business verticals: Enterprise Lending, Asset Finance and Consumer Finance. The company is one of India’s largest and fastest growing customer franchises, according to the CRISIL Report, and has served 17.5 million customers as at September 30, 2024, which grew at a CAGR of 28.22% between March 31, 2022 and September 30, 2024. The company primarily caters to underserved and underbanked customers in low to middle-income households with minimal or no credit history.
HDB Financial Services IPO: Offer Size & Reservations
HDB Financial Services IPO amounts up to INR 12,500 crore comprises of a fresh issue of equity shares aggregating up to INR 2,500 crores and an offer for sale (OFS) aggregating up to INR 10,000 crores by HDFC Bank with face value of INR 10 each equity share.
The offer includes a reservation of shares for subscription by eligible employees while 10% of the shares are reserved for subscription by eligible HDFC Bank shareholders. Shareholder quota is another big draw for IPO investors.
In the over the counter market, HDB Financial Services unlisted shares are trading at INR 1,450 per share.
HDB Financial Services IPO: Pre-IPO on Cards
The company in consultation with the BRLMs may consider a Pre-IPO placement, prior to filing the Red Herring Prospectus (RHP). The Pre-IPO placement, if undertaken, will be at a price to be decided by the company, in consultation with the BRLMs. If the pre-IPO placement is completed, the amount raised pursuant to the pre-IPO placement will be reduced from the fresh issue, subject to compliance with rule 19(2)(b) of the SCRR.
HDB Financial Services proposes to utilize the net proceeds from the fresh issue towards augmenting the company’s Tier – I Capital base to meet the company’s future capital requirements including onward lending, arising out of the growth of the business.
JM Financial Limited, BNP Paribas, BofA Securities India Limited, Goldman Sachs (India) Securities Private Limited, HSBC Securities and Capital Markets (India) Private Limited, IIFL Securities Limited, Jefferies India Private Limited, Morgan Stanley India Company Private Limited, Motilal Oswal Investment Advisors Limited, Nomura Financial Advisory and Securities (India) Private Limited, Nuvama Wealth Management Limited and UBS Securities India Private Limited are the Book Running Lead Managers to HDB Financial Services IPO.
