HDB Financial Services gets Sebi approval for ₹12,500 crore IPO

HDB's IPO, the largest by an NBFC and fifth-largest overall, receives Sebi approval and is set to meet RBI's listing deadline for upper-layer NBFCs

HDB Financial Services, the non-banking finance (NBFC) arm of HDFC Bank, on Tuesday received approval from the Securities and Exchange Board of India (Sebi) to launch one of the largest initial public offerings (IPOs).

 

HDB’s IPO will be the largest NBFC IPO and the fifth-largest overall to hit the domestic markets.

 

The lender filed a draft red herring prospectus with the markets regulator in October 2024 for its IPO, which involved an offer for sale of ₹10,000 crore by HDFC Bank and a fresh issue of ₹2,500 crore.

 

HDFC Bank owns a 94.36 per cent stake in HDB Financial Services. After the IPO is completed, HDB Financial Services will continue to remain a subsidiary of HDFC Bank. 

 

The lender is required to list on the bourses by 30 September 2025, according to Reserve Bank of India (RBI) guidelines for upper-layer NBFCs.

 

Another upper-layer NBFC, Tata Capital, is also expected to hit the capital market soon with its ₹15,000 crore IPO, subject to Sebi approval. In April, Tata Capital filed preliminary papers with Sebi for the IPO under the confidential pre-filing route.

 

Tata Sons owns a 93 per cent stake in Tata Capital.

 

HDB Financial Services plans to use the proceeds from the IPO to enhance its Tier-I capital base and to address future capital needs, including those for onward lending.

 

The approval for HDB’s IPO was delayed because of unresolved compliance issues, including potential breaches of norms related to share issuances by unlisted companies.

 

The IPO approval process was complicated by alleged violations of the Companies Act, including excess shareholders and Esop issuance irregularities.

 

Established in 2007, HDB Financial Services is an upper-layer non-deposit-taking non-banking finance company (NBFC) that offers both secured and unsecured loans.

 

JM Financial, BNP Paribas, BofA Securities India, Goldman Sachs (India) Securities, HSBC Securities and Capital Markets (India), IIFL Securities, Jefferies India Pvt Ltd, Morgan Stanley India, Motilal Oswal Investment Advisors, Nomura Financial Advisory and Securities (India), Nuvama Wealth Management, and UBS Securities India are the lead book managers for the IPO. 

Listing on cards 

Of ₹12,500 crore, ₹10, 000 crore is offer for sale and ₹2,000 crore is fresh issue  The company had filed DRHP in October 2024

  The firm has to list by September according to RBI upper layer NBFC regulations

  HDFC Bank owns 94.36 per cent in HDB Financial Services