HDFC Bank's HDB Financial files Rs 12,500 crore IPO. Check details

HDFC Bank, holding a 94.6% stake in HDB Financial, will sell shares worth up to Rs 10,000 crore, while HDB Financial plans to issue fresh shares totalling Rs 2,500 crore, as outlined in the filing.

In Short

• HDB Financial files IPO papers to raise up to Rs 12,500 crore
• HDFC Bank plans Rs 10,000 crore stake sale in HDB Financial
• HDB Financial's loan book grows 21%, reaching Rs 98,620 crore

HDB Financial Services, the non-banking lending arm of HDFC Bank, has filed draft papers for an initial public offering (IPO) to raise up to Rs 12,500 crore, in line with HDFC Bank's earlier announcement this month.

HDFC Bank, holding a 94.6% stake in HDB Financial, will sell shares worth up to Rs 10,000 crore, while HDB Financial plans to issue fresh shares totalling Rs 2,500 crore, as outlined in the filing.

Key details, such as the offer price, price band, and minimum bid size, will be determined later in consultation with lead managers Jefferies, Goldman Sachs, and BofA Securities.

HDB Financial intends to use its share of the IPO proceeds to fund capital needs, expand lending, and meet regulatory requirements.

HDFC Bank’s approval of the unit’s IPO last month marks the group's first public listing in six years. This move also aligns with regulatory guidelines that require certain large non-banking financial companies (NBFCs) to go public by September 2025.

Incorporated in 2007, HDB Financial provides a variety of secured and unsecured loans, including consumer, business, and microloans. It operates through more than 1,680 branches across India and reported a gross loan book of Rs 98,620 crore as of September 30, indicating a nearly 21% increase over two years.

HDB's profit rose significantly, reaching Rs 2,460 crore in FY24, a 56% increase between FY22 and FY24. However, its net interest margin (NIM), a critical measure of profitability, declined slightly to 7.85% in FY24 from 8.25% the previous year.