IPO Details
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Schedule of HDB Financial Services Ltd IPO
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End date
Allotment of bids
Refund Initiation
Listing on exchange
About HDB Financial Services Ltd IPO
The IPO of HDB Financial Services Ltd is a 100% book-built issue. It comprises a fresh issue and an offer for sale. The fresh issue aggregates up to ₹2500 crore, while the offer for sale aggregates up to ₹10,000 crore.
Objectives of HDB Financial Services Ltd IPO
The company plans to utilise the net proceeds from the IPO to augment its tier-I capital to meet its future capital requirements including onward lending.
HDB Financial Services Ltd IPO Valuation
| Detail | Information |
|---|---|
Upper Price Band | TBA |
Fresh Issue | Up to ₹2500 crore |
Offer for Sale | Up to ₹10,000 crore |
EPS (Basic) in ₹ | 31.08 |
HDB Financial Services Ltd IPO Offer and Subscription Details
| Investor Category | Shares Offered |
|---|---|
QIBs | Not more than 50% of the offer |
Non-institutional Bidders | Not less than 15% of the offer |
RIBs | Not less than 35% of the offer |
Industry Outlook
NBFCs have shown remarkable resilience and gained importance in the financial sector ecosystem, growing from less than ₹2 trillion AUM at the turn of the century to ₹41 trillion at the end of Fiscal 2024. During Fiscals 2019 to 2024, NBFC credit is estimated to have witnessed growth at a CAGR of 11%.
Rapid revival in the economy is expected to drive consumer demand in Fiscal 2025, leading to healthy growth in NBFCs. Going forward, CRISIL MI&A expects NBFC credit to grow at 15-17% between Fiscal 2024 and Fiscal 2027 driven by growth in the retail segment, and MSME loans in the wholesale segment.
Company Information
HDB Financial Services Ltd is one of the leading, diversified retail-focused non-banking financial companies (NBFCs) in terms of total gross loan book size, according to the CRISIL Report. The company is categorised as an Upper Layer NBFC (NBFC-UL) by the RBI. The company offers a large portfolio of lending products that cater to a growing and diverse customer base through a wide Omni-channel distribution network.
HDB Financial Services Ltd Strengths
Highly granular retail loan book, bolstered by a large and rapidly growing customer base with a focus on serving the underbanked customer segments
HDB Financial Services Ltd is one of India’s largest and fastest growing customer franchises according to the CRISIL Report. It has served 17.5 million customers as at September 30, 2024, which grew at a CAGR of 28.22% between March 31, 2022 and September 30, 2024. The growth of its customer base is supported by the government’s policies aiming to promote financial inclusion for the middle-class.
Large, diversified and seasoned product portfolio with a sustainable track record of diversification, growth and profitability through the cycles
The company has built a balanced and diversified portfolio of lending products that seek to fulfil a wide range of needs and aspirations for its customers, including its underbanked customers. As on September 30, 2024, its product portfolio consisted of 13 lending products spanning across its three business verticals of Enterprise Lending, Asset Finance and Consumer Finance.
Tailored sourcing supported by an omni-channel and digitally powered pan-India distribution network
The company’s phygital sourcing network is composed of its own internal distribution network, its external distribution network as well as its digital capabilities. The company has a pan-India presence with no region accounting for more than 35% of its total gross loans for the six-month period ended on September 30, 2024.
Risks of HDB Financial Services Ltd
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Any downturn in the macroeconomic environment in India could adversely affect its business, results of operations, cash flows and financial condition.
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Gross Stage 3 loans amounted to 2.10%, 2.38%, 1.90%, 2.73% and 4.99% of Total Gross Loans as on September 30, 2024 and September 30, 2023, and as on March 31, 2024, March 31, 2023 and March 31, 2022, respectively. Non-payment or default by its customers, its inability to provide adequate provisioning coverage for non-performing assets or change in regulatorily mandated provisioning requirements may adversely affect its financial condition and results of operations.
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As on September 30, 2024 and September 30, 2023, and as on March 31, 2024, March 31, 2023 and March 31, 2022, respectively, unsecured loans comprised 28.92%, 28.11%, 28.66%, 27.13% and 26.42% of its total gross loans, respectively. Its unsecured loan portfolio is not supported by any collateral that could help ensure repayment of the loan, and in the event of non-payment by a borrower of one of these loans, it may be unable to collect the unpaid balance.
All Financial Information about HDB Financial Services Ltd
Particulars (in Rs. crores)
Particulars (in Rs. crores)
Comparison with peers
| Paramter for FY 24 | HDB Financial Services Ltd | Aditya Birla Finance Limited | Bajaj Finance Ltd | Cholamandalam Investment and Finance Company Ltd | L&T Finance Limited | Mahindra & Mahindra Finance | Shriram Finance Ltd | Sundaram Finance Ltd | Tata Capital Ltd |
|---|---|---|---|---|---|---|---|---|---|
AUM (in ₹crore) | 90230 | 105640 | 244830 | 153720 | 85570 | 102590 | 224860 | 43990 | 109270 |
Profit after tax (in ₹ crore) | 2460 | 2220 | 12640 | 3420 | 2290 | 1760 | 7190 | 1450 | 2490 |
Return on Equity (in %) | 19.55 | 16.65 | 20.48 | 20.22 | 10.27 | 9.98 | 15.65 | 16.90 | 14.58 |
IPO Registrar and Book Running Lead Managers
Link Intime India Pvt Ltd is the registrar of HDB Financial Services Ltd. The book running lead managers are:
- JM Financial Ltd
- BNP Paribas
- BofA Securities India Limited
- Goldman Sachs (India) Securities Private Ltd
- HSBC Securities and Capital Markets (India) Private Ltd
- IIFL Securities Ltd
- Jefferies India Private Ltd
- Morgan Stanley India Company Private Ltd
- Motilal Oswal Investment Advisors Ltd
- Nomura Financial Advisory and Securities (India) Private Ltd
- Nuvama Wealth Management Ltd
- UBS Securities India Private Ltd
Business Model
HDB Financial Services Ltd’s product offerings include business loans, loans for the purchase of new and used vehicles and equipment and loans for the purchase of consumer, digital and lifestyle durables and personal vehicles. As of September 30, 2024, its product portfolio consisted of 13 lending products spanning across three business verticals of Enterprise Lending, Asset Finance and Consumer Finance.
The company also offers business process outsourcing (BPO) services to its promoter and fee-based products such as distribution of insurance products primarily to its lending customers.
Company Growth Trajectory
They are one of India’s largest and fastest growing customer franchises according to the CRISIL Report, and they have served 17.5 million customers as of September30, 2024, which grew at a CAGR of 28.22% between March 31, 2022 and September 30, 2024. The company’s total revenue from operations jumped from ₹11306.29 crore in FY 22 to ₹14171.12 crore in FY 24. Its EBITDA stood at ₹8314.13 crore in FY 24 from ₹4772 crore in FY 22.
As of September 30, 2024, their loan book is well diversified and granular across products with no single product accounting for more than 25% of their total gross loan book. They had ₹98620 crores of loans outstanding as at September 30, 2024, as compared to ₹61330 crores as of March31, 2022, reflecting a growth at a CAGR of 20.93%.
Market Position
HDB Financial Services Ltd is one of India’s leading NBFCs in terms of total gross loan book size. Its total gross loans stood at ₹98620 crore as at September 30, 2024, reflecting a CAGR of 20.93% between March 31, 2022 to September 30, 2024. They are one of India’s largest and fastest growing customer franchises, according to the CRISIL Report, and they served 17.5 million customers as on September 30, 2024.
Its total gross loans growth, operating efficiencies and strong asset quality helped it deliver return on average assets of 3.03% and return on average equity of 19.55% for Fiscal 2024, which is one of the highest amongst its NBFC peers, according to the CRISIL Report.
HDB Financial Services Ltd Profit and Loss
| Parameter | FY 24 | FY 23 | FY 22 |
|---|---|---|---|
Total Comprehensive Income (in ₹ crore) | 2424.44 | 1969.91 | 1025.19 |
Profit Before Tax (in ₹ crore) | 2,460.84 | 1,959.35 | 1,011.40 |
Restated Profit After Tax (in ₹ crore) | 2460.84 | 1959.35 | 1011.40 |
Basic EPS in ₹ | 31.08 | 24.78 | 12.81 |
EBITDA (in ₹ crore) | 8314.13 | 6251.16 | 4772 |
HDB Financial Services Ltd Cash Flow Statement
| Parameter | FY 24 | FY 23 | FY 22 |
|---|---|---|---|
Profit/ (loss) Before Tax (in ₹ crore) | 3304.67 | 2627.40 | 1347.56 |
Net Cash Flow Generated From/ (Used in) Operating Activities (in ₹ crore) | (16736.04) | (6850.61) | (1987.10) |
Net Cash Generated From / (Used in) Investing Activities (in ₹ crore) | (2145.56) | 973.32 | (703.28) |
Net Cash Generated From / (Used in) Financing Activities (in ₹ crore) | 19133.55 | 5795.99 | (1499.54) |
Cash and Cash Equivalents at the End of the Year (in ₹ crore) | 647.85 | 395.90 | 477.20 |
How to Check Allotment Status of HDB Financial Services Ltd IPO?
You can check the allotment status of HDB Financial Services Ltd either on the BSE website or through the registrar’s portal. To check allotment status via BSE website:
- Visit the BSE website
- Click on “Investor Services” and choose “Application Status Check”
- Choose the issue type — Equity or Debt
- Select the Issue Name from the drop-down.
- Enter your application number or PAN number
- Check the box that says “I’m not a Robot” and click on “Search” to know the allotment status
To know status through registrar’s portal:
- Visit the website of Link Intime India Private Ltd
- Choose ‘Public Issues’ from Investor Services dropdown
- Choose the name of the company from ‘Select Company’ dropdown
- Enter any of these - PAN Number, Application Number, DP/Client ID, Account Number / IFSC
- Click on Submit to check the status
How to Apply for HDB Financial Services Ltd IPO?
How To Apply for Borana Weaves Ltd IPO?
To apply for Borana Weaves Ltd IPO:
- Step 1: Log in to your Kotak Securities Demat account - Log in to your Demat account to access IPO investments. Next, select the current IPO section.
- Step 2: Specify IPO details - Enter the number of lots and the price you wish to apply for.
- Step 3: Enter UPI ID - After entering your UPI ID, click submit. This will place your bid with the exchange.
- Step 4: Mandate Notification - Your UPI app will receive a mandate notification to block funds.
- Step 5: Approve Request - Your funds will be blocked once you approve the mandate request on your UPI.
This article is for informational purposes only and does not constitute financial advice. It is not produced by the desk of the Kotak Securities Research Team, nor is it a report published by the Kotak Securities Research Team. The information presented is compiled from several secondary sources available on the internet and may change over time. Investors should conduct their research and consult with financial professionals before making any investment decisions. Read the full disclaimer here.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing. Please read the SEBI-prescribed Combined Risk Disclosure Document before investing. Brokerage will not exceed SEBI’s prescribed limit.
HDB Financial Services Ltd IPO FAQs
What is the HDB Financial Services Ltd IPO?
The IPO of HDB Financial Services consists of a fresh issue and an offer for sale. The total offer size aggregates up to ₹12500 crore.
When will the IPO of HDB Financial Services Ltd go live?
The exact dates of the HDB Financial Services IPO are yet to be announced.
From where can I read more about HDB Financial Services Ltd and its IPO?
You can read more about HDB Financial Services Ltd from the company’s draft red herring prospectus here.
