HDB Financial Services jumps 13% on debut, valued at ₹69,704 crore

HDB Financial Services gains over 13 per cent on market debut with Rs 69,704 crore valuation after strong IPO demand, though RBI's stake cap proposal could weigh on outlook

HDB Financial Services witnessed a strong debut on the bourses, with its shares climbing more than 13 per cent over its issue price. The non-banking financial company's (NBFC) shares closed at ₹840.3, a gain of ₹100.3, or 13.55 per cent, above its issue price of ₹740. Trading volume was robust, with shares worth over ₹7,400 crore exchanged on both the National Stock Exchange (NSE) and the BSE, with its share hitting a low of ₹827 and a high of ₹851.

 

At the end of trading, HDB Financial Services, a subsidiary of HDFC Bank, was valued at ₹69,704 crore, up from ₹61,253 crore during the initial public offering (IPO). This valuation places the company as the eighth most valuable NBFC in India.

 

The significant rise was driven by strong demand from institutional investors during the company's ₹12,500 crore IPO, the largest of the year and the fifth largest in the domestic market. The IPO had received 17 times more demand than the shares on offer, generating bids worth ₹1.6 trillion, with over 80 per cent of the bids coming from institutional investors.

 

The IPO comprised a fresh issue of ₹2,500 crore and an offer for sale of ₹10,000 crore by HDFC Bank. HDB Financial Services plans to use the proceeds to strengthen its core capital base, positioning it for accelerated growth. 

 

HDB Financial Services is a diversified, upper-tier NBFC that offers loans through three key verticals: enterprise lending, asset finance, and consumer finance. As of March 31, 2025, its secured loans constituted 73 per cent of the total loan book. In FY25, the company reported a net profit of approximately ₹2,180 crore.

 

The company currently manages assets worth nearly ₹1 trillion, which is lower than those of other NBFC peers such as Bajaj Finance (₹2.75 trillion), Cholamandalam Investment and Finance (₹1.6 trillion), M&M Finance (₹1.12 trillion), and Shriram Finance (₹2.4 trillion).

 

Analysts noted that HDB Financial Services currently trades at slightly over three times its estimated FY26 book value, which is a discount compared to peers like Bajaj Finance and Cholamandalam, both of which have superior return ratios and growth prospects. However, most broking houses had issued a "subscribe" rating for the IPO, citing HDB's robust franchise, strong promoter backing, and relatively better asset quality than most NBFC peers.

 

Experts highlighted that a proposal by the Reserve Bank of India (RBI), if approved, could require HDFC Bank to reduce its stake in HDB Financial Services to 20 per cent. This potential regulatory change could be a key overhang for the stock. Following the IPO, HDFC Bank's stake in HDB Financial Services has decreased from 94.04 per cent to 74.19 per cent.