HDB Financial IPO Day 3: Issue booked over 15x, GMP increases; check allotment date

The initial public offering (IPO) of HDB Financial Services saw a strong bidding interest from the investors during the third and final day of the bidding process from all the categories of the investors, thanks to HNI & QIB push. The issue was booked 37 per cent on the first day and ended day two with more than 1.2 times subscription.

HDB Financial Services is selling its shares in the price band of Rs 700-740 apiece. Investors can apply for a minimum of 20 shares and its multiples thereafter. It is looking to raise Rs 12,500 crore via IPO, which includes a fresh share sale of Rs 2,500 and an offer-for-sale (OFS) of up to Rs 10,000 crore by HDFC Bank.

According to the data, the investors made bids for 1,98,58,50,220 equity shares, or 15.22 times, compared to the 13,04,42,855 equity shares offered for the subscription by 3.45 pm on Friday, June 27, 2025. The bidding for the issue, which kicked-off on Wednesday, shall conclude today.

The allocation for qualified institutional bidders (QIBs) was subscribed 49.81 times, while the portion reserved for non-institutional investors (NIIs) saw a subscription of 9.90 times. Allocations for shareholders and eligible employees were subscribed 4.12 times and 5.48 times, respectively. However, the quota set aside for retail investors was booked 1.32 times at the same time.

Incorporated in 2007, Ahmedabad-headquartered HDB Financial Services is a retail-focused, non-banking financial company. Its lending products are offered through the three business verticals- enterprise lending, asset finance and consumer finance. It also offers business process outsourcing (BPO) services to its parent HDFC Bank.

The grey market premium (GMP) of HDB Financial Services has seen a decent rise on the third day on the back of strong bidding. Last heard, the company was commanding a premium of Rs 60-65 per share in the unofficial market, suggesting a 8-9 per cent listing gains for the investors. The GMP stood around Rs 50 a day ago.

Analysts mostly have a positive view on this issue. They are positive on the strong parentage of HDFC Group, diversified product portfolio, pan India network, strong growth in the customer base, growth potential, decent asset quality, reasonable valuations. However, Unsecured loan book, rising competition and high cost of operations are some of concerns for the issue.

HDB Financial is asking a market cap of Rs 61,388 crore and based on FY 2025 earnings and fully diluted post-IPO paid up capital, the company is asking for price to book ratio (P/B) of 3.5 times which seems fairly valued looking at its industry average 3.5-4 times, said Mehta Equities.

"Given its strong parentage, proven execution across cycles, diversified loan mix, and digital-first approach, we believe HDB Financial Services is well positioned to benefit from India’s ongoing financial inclusion and expanding retail credit demand. Hence, looking at all attributes we recommend investors to 'subscribe' the HDB Financial Services IPO for long term perspective," it said.

For the year ended on March 31, 2025, HDB Financial Services reported a net profit of Rs 2,175.92 crore with a revenue of Rs 16,300.28 crore. The company clocked a net profit of Rs 2,460.84 crore with a revenue of Rs 14,171.12 crore for the financial year 2023-24. The company shall command a market capitalization more than Rs 61,250 crore.

HDB Financial Services raised Rs 3,369 crore from 141 anchor investors as it allotted 4.5 crore shares at Rs 740 apiece. It has reserved shares for Rs 20 crore for its eligible employees, while shares for Rs 1,250 crore are reserved for the eligible shareholders of HDFC Bank. It has reserved 50 per cent of the net offer for QIBs, 15 per cent NIIs and 35 per cent for retailers.

Backed by strong parentage, AAA-rated credit profile, and an expanding footprint, HDB is positioned to leverage growth in underserved segments, said AC Choski Share Brokers with a 'subscribe for long-term' rating. "However, challenges around rising NPAs, elevated credit costs, and subdued ROEs remain near-term watchpoints," it said.

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