Brokerages upbeat on HDB Financial IPO; GMP up 10%; should you subscribe?

HDB Financial Services IPO opens for public subscription: Brokerages remain upbeat on the much-awaited initial public offering (IPO) of HDB Financial Services, which opens for public subscription today, Wednesday, June 25, 2025.  Analysts at Mirae Asset Sharekhan, SBI Securities, Centrum Broking, Choice Broking, Deven Choksey Research, and Bajaj Broking are optimistic about the HDB Financial IPO, citing that the public issue is priced at a steep discount compared to its peers and is well positioned to register healthy growth going forward, along with an improvement in asset quality.

 

Notably, this public offering, HDFC Bank’s non-banking financial company (NBFC) arm, is set to be the largest NBFC IPO in the country. At the upper end, the company seeks to raise ₹12,500 crore from the public offering. The NBFC has announced that it has already raised ₹3,369 crore from anchor investors during the bidding concluded on June 24. 

 

Make smarter market moves with The Smart Investor. Daily insights on buzzing stocks and actionable information to guide your investment decisions delivered to your inbox.

Subscribe

 

Adding to the buzz, the shares of HDB Financial are commanding a decent premium in the grey market on the first day of its opening. Sources tracking grey market activities reveal that HDB Financial shares are trading at around ₹814 per share, reflecting a grey market premium (GMP) of ₹74, or 10 per cent over the upper end of the issue price of ₹740. A positive GMP is usually indicated as a favourable market sentiment for the public offering.

That said, before delving into the brokerages' calls, let's review the key details of the HDB Financial IPO:

HDB Financial Services IPO details

HDB Financial IPO is a book-building issue of ₹12,500 crore, which comprises a fresh issue of 33.8 million equity shares aggregating up to ₹2,500 crore, and an offer for sale (OFS) with HDFC Bank divesting up to 135.1 million equity shares aggregating to ₹10,000 crore.

 

The public issue of HDB Financial is available at a price band of ₹700–740, with a lot size of 20 shares. Thus, investors can bid for a minimum of 20 shares and in multiples thereof. The minimum amount required to bid for the HDB Financial IPO by retail investors is ₹14,800.

 

The three-day subscription window to bid for the HDB Financial IPO will end on Friday, June 27, 2025. Following the closure of the subscription window, the basis of allotment of HDB Financial shares is likely to take place on Monday, June 30, 2025, and the company's shares will be credited into demat accounts on Tuesday, July 1, 2025.

 

After the allotment, HDB Financial shares are slated to make their debut on the bourses on Wednesday, July 2, 2025. HDB Financial shares will be listed on the BSE and NSE. 

HDB Financial will not receive any proceeds from the OFS, as these will be given to the promoter selling shareholder (HDFC Bank) in relation to the equity shares offered as part of the OFS, after deducting its portion of the offer-related expenses and applicable taxes.

 

The company, however, proposes to utilise the net proceeds from the fresh issue to augment its Tier-I capital base and meet future capital requirements, including onward lending arising from business growth. Additionally, a portion of the proceeds from the fresh issue will be used to cover offer expenses.

 

MUFG Intime India (Erstwhile Link Intime) is the registrar for the HDB Financial IPO, while BNP Paribas, JM Financial, BofA Securities India, Goldman Sachs (India), HSBC Securities & Capital Markets, IIFL Capital Services, Jefferies India, Morgan Stanley India, Motilal Oswal Investment Advisors, Nomura Financial Advisory and Securities (India), Nuvama Wealth Management, and UBS Securities India are the book-running lead managers of the public issue.

HDB Financial Service IPO review: Should you subscribe to the HDB Financial IPO?

SBI Securities - Subscribe

Analysts at SBI Securities have recommended investors to subscribe to the HDB Financial IPO, citing that the company is backed by strong parentage, brand, governance, risk management, and a high credit rating. It is one of the largest NBFCs catering to the 2nd largest customer franchise.

 

The company, analysts said, is valued at an FY25 P/B of 3.2x/3.4x at post-issue capital at the lower price band & upper price band respectively. "The company is well placed to register healthy growth going ahead, while witnessing an improvement in asset quality. We recommend investors Subscribe to the issue at the cut-off price," wrote the analysts in a research note. 

Centrum Broking - Subscribe

The brokerage firm Centrum Broking in its report has assigned a Subscribe rating on the HDB Financial IPO. "At the IPO price of ₹ 740/share, the issue is valued at <3x FY26E P/ABV, which is at a steep discount to larger peers such as Bajaj Finance and Chola (refer exhibit 9), discounting relatively lower return ratios and growth," said the brokerage in its report.

 

The brokerage recommends a Subscribe rating to the issue, supported by "a robust brand franchise and granular retail lending model, a wide-reaching omni-channel (phygital) distribution platform, and access to low-cost funding anchored by a AAA-rated credit profile." 

Deven Choksey Research - Subscribe

Analysts at Deven Choksey Research have assigned a Subscribe rating on the public offering of HDB Financial Services, citing that the issue is attractively priced considering its parentage, peer group ROA average, and growth potential. 

 

The analysts expect that "its AUM and disbursement will witness higher growth compared to FY25, led by higher urban and rural consumer demand driven by the government’s intervention in reducing income tax rates, RBI’s efficient inflation management, and expected cuts in GST rates for the overall consumption basket."

Mirae Asset Sharekhan - Not rated

The analysts at Mirae Asset Sharekhan remain bullish on the public offering of HDB Financial, citing its reasonable valuations and expecting healthy listing gains. They remain assertive from a medium to long-term perspective. The company is valued at an FY25 price-to-book ratio of ~3.2x/~3.4x at post-issue capital at the lower price band & upper price band respectively, which, they said, is reasonable as compared to its peers considering the growth and return ratio profile.  "Strong parentage and being much smaller in size compared to its core peer (Bajaj Finance) provides a long runway for growth. Additionally, a favourable macro environment will act as a tailwind for the sector in the near to medium term," wrote the analysts in a research note. They, however, have not rated the public offering.

Choice Broking - Subscribe for long term

Brokerage firm Choice Broking has recommended investors to subscribe to HDB Financial for the long-term perspective. At the higher price band, the issue is valued at a P/BV of 3.4x (based on post-issue BVPS), which, the brokerage said, is in line with the peer average, making the issue appear fully priced.  "While the company has delivered steady growth in interest income driven by the expansion of its gross loan book, profitability has been impacted by interest rate volatility, leading to a decline in PAT for FY25. Additionally, the NIM has been under pressure and remains lower compared to peers. The declining ROE and PCR further underscore operational concerns," said the brokerage in its report.

 

"Although the company is well-positioned for long-term growth, supported by its strong brand and expanding customer base, considering the near-term operational challenges, we recommend a 'Subscribe for long term' rating for this issue."

Bajaj Broking - Positive

Analyst at Bajaj Broking has assigned a positive rating on the HDB Financial IPO, citing that the public issue is suitable for investors with a 3–5 year horizon.

 

"HDB Financial IPO pricing implies a valuation of approximately $7.1 billion at the upper end. Despite grey market indications of a higher value, the pricing appears aligned with peers like Bajaj Finance and Shriram Finance on a price-to-book basis. Valuation is supported by long-term structural tailwinds in NBFC lending, especially to underserved segments. However, near-term asset quality and margin pressures pose risks," wrote the analyst in a report.

 

"Investors with a medium- to long-term outlook may find the issue attractive, provided the company sustains growth while improving operating efficiency and asset quality post-listing," they said.

About HDB Financial Services

A subsidiary of HDFC Bank, HDB Financial Services (HDB) is the seventh-largest retail-focused NBFC in India by gross loan book and is classified as an Upper Layer NBFC by the RBI. Despite promoter backing, it operates independently across sourcing, underwriting, operations, and risk management. Further, it offers BPO services to its parent and distributes insurance and other fee-based products.