HDFC Prepares for HDB Financial IPO: Listing NBFC Arm Ahead

According to sources cited in Economic Times story, HDFC Bank, biggest private lender in India, has started preparing for much anticipated initial public offering (IPO) of its subsidiary HDB Financial Services.

Depending on state of market, HDB Financial, non-deposit-taking lender, would be valued between $9 billion & $12 billion (₹75,000 Cr to ₹1 lakh Cr) during IPO, investment banker source told newspaper.

According to source, HDFC Bank owns 94.7% of its arm & is thinking of selling off 10 percent interest in IPO, which might result in issue size of between ₹7,500 & 10,000 Cr. HDFC Bank is also thinking of placing investor shares prior to initial public offering.

According to statement, HDFC Bank has contacted renowned investment banks to request bids & valuation estimates for planned initial public offering.

HDFC Bank is gearing up for significant move by planning to list its subsidiary, HDB Financial Services, through initial public offering (IPO). This move could potentially reshape financial landscape, offering investors chance to participate in one of India's largest private lenders' expansion.

Key Details of HDB Financial IPO

HDFC Bank, holding substantial 94.7% stake in HDB Financial, aims to divest 10% stake through IPO. This measure could result in issue size ranging from ₹7,500 to ₹10,000 cr. Additionally, HDFC Bank is considering pre-IPO share placement with investors, further enhancing IPO's potential.

HDB Financial's IPO Expected Valuation & Market Impact

HDB Financial's IPO is anticipated to fetch valuation between $9 billion to $12 billion (₹75,000 to ₹1 lakh cr), subject to prevailing market conditions. This significant valuation underscores confidence in HDB Financial's prospects & potential for robust investor interest.

Timeline & Regulatory Compliance

IPO assumes greater significance as HDB Financial must adhere to Reserve Bank of Indi regulations by listing before September 2025. HDFC Bank aims to initiate share sale either in 4^th quarter of 2024/1^st quarter of 2025, marking pivotal moment for both entities.

HDB Financial Financial Overview

As of March 31, 2023, HDB Financial operates vast network of 1,492 branches nationwide, positioning it as one of India's largest listed finance companies in terms of market capitalization. company's total revenue from operations stood at ₹12,403 cr, with profit after tax of ₹1,959 cr for same period. HDB primarily focuses on vehicle loans, loans against property, & personal loans, reflecting its diversified portfolio & strong financial performance.

Market Expectations & Investor Interest

Brokers anticipate robust listing for HDB Financial, attributing it to company's track record of profitability & robust parentage under HDFC Bank. Anticipation surrounding IPO is evident in HDB shares, which have surged over 30% in past three months in unlisted market, indicating strong investor confidence & expectations for successful debut.

Final Thoughts

HDB Financial's upcoming IPO marks significant milestone for HDFC Bank & broader financial sector in India. With substantial stake divestment planned & promising valuation expected, IPO presents compelling opportunity for investors to participate in growth story of one of India's premier financial institutions. Regulatory compliance deadlines loom, HDFC Bank's strategic move to list HDB Financial sets stage for transformative journey, poised to redefine dynamics of financial landscape.