HDB Financial Services IPO: Complete Guide with Details, Business Model, and Risks

The much-anticipated HDB Financial Services IPO is opening for subscription from June 25 to June 27. With a price band of ₹700 to ₹740 per share, investors are keenly watching this public issue backed by HDFC Bank. A single lot will consist of 20 shares, and the IPO will be listed on both NSE and BSE.

IPO Structure

The total issue size of the HDB Financial Services IPO is ₹12,500 crore. Out of this, only ₹2,500 crore is a fresh issue, while the remaining ₹10,000 crore is an Offer for Sale (OFS), where existing shareholders, particularly HDFC Bank, will offload a portion of their stake. The fresh issue proceeds will be used to strengthen Tier-1 capital, enabling the company to expand its lending capacity.

Allotment and Listing Timeline

• IPO Open Date: June 25, 2025
• IPO Close Date: June 27, 2025
• Allotment Date: June 30, 2025
• Refund Date: July 1, 2025
• Shares in Demat: July 1, 2025
• Listing Date: July 2, 2025

IPO Details

Out of the ₹12,500 crore IPO size, ₹2,500 crore will be raised through fresh issue to strengthen tier 1 capital, boosting lending capacity. ₹10,000 crore will come from OFS by HDFC Bank. 10% is reserved for HDFC Bank shareholders (as on June 19, 2025). Joint accounts require the first applicant to be a shareholder. Multiple category applications (retail, shareholder, employee) are allowed and not treated as duplicate bids.

What Does HDB Financial Services Do?

Incorporated in 2007, HDB Financial Services is a retail-focused NBFC offering loans to individuals and businesses. With 1,771 branches across 31 states/UTs, over 80% are outside the top 20 cities, focusing on tier 2 and 3 regions to improve financial access.

• Business loans
• Personal loans
• Vehicle loans (tractors, CVs, construction equipment)
• Gold loans
• Consumer durable loans
• Loan against property
• Digital loans
• Microfinance

HDB finances products like tractors and JCBs that generate income for borrowers, making repayments more secure.

Products

HDB offers enterprise and individual loans, including gold loans, LAP, and SME finance. In asset finance: tractor, CV, and JCB loans. Consumer loans cover personal, auto, two-wheeler, and durable goods. Microfinance and insurance distribution (health, life, general) add revenue. It also operates a BPO serving HDFC Bank.

Business Model: Phygital Presence

Operates on a physical + digital model. 80% customers served via branches, 20% digitally. Over 1,700 branches and 45,000 employees enable national coverage with tech-enabled, paperless onboarding.

Financial Performance

• Revenue Growth: Increasing consistently over 3 years.
• Profit Trends: Up from FY23 to FY24; slight drop in FY25 despite higher revenue.
• Assets & Net Worth: Growing healthily.
• Borrowings: Rising, normal for NBFCs to fuel lending.

NBFCs typically operate by borrowing and lending capital, so higher borrowings are expected and not a concern here.

Promoter Holding

Pre-IPO, HDFC Bank held 94%. Post-IPO, this reduces to 74.19%, indicating a ~20% dilution through OFS.

Strengths of HDB Financial Services

• Strong Parentage: Backed by HDFC Bank.
• Large Customer Base: 17.8 million clients as of FY2024.
• Low Credit Concentration: Only 0.36% with top 20 clients.
• Widespread Reach: Over 1,400 dealer and retail touchpoints.
• High Credit Rating: AAA-rated.
• Digital Integration: Fully digital onboarding system.

Should You Invest in HDB Financial Services IPO?

The IPO is promising for investors eyeing the NBFC space with strong backing from HDFC Bank. With diversified loans, tier-3 market focus, and consistent performance, it holds potential. However, risks include unsecured loans and market cycles. Always consult a financial advisor before investing.