HDB Financial Services Ltd, the non-banking financial subsidiary of HDFC Bank, made a robust debut on Indian stock exchanges today, listing at a 13% premium to its issue price, reflecting strong investor demand for quality NBFCs with a diversified retail lending portfolio. The stock opened at Rs 1,243 on NSE against the issue price of Rs 1,100, underscoring market confidence in HDB’s earnings growth and strategic alignment with HDFC Bank.
Listing Day Summary
| Particulars | Details |
|---|---|
| Issue Price | Rs 1,100 |
| Listing Price | Rs 1,243 |
| Intraday High | Rs 1,255 |
| Intraday Low | Rs 1,228 |
| Closing Price | Rs 1,240 |
| Listing Premium | 13% |
| Market Cap On Listing | ~Rs 80,000 crore |
Source: NSE data
IPO Subscription Details
HDB Financial’s IPO witnessed robust demand across investor categories, getting oversubscribed by 7.5 times overall.
| Category | Subscription (times) |
|---|---|
| Qualified Institutional Buyers (QIB) | 9.2 |
| Non-Institutional Investors (HNI) | 6.4 |
| Retail Individual Investors (RII) | 5.7 |
| Employees | 3.2 |
| Total | 7.5 |
About HDB Financial
HDB Financial Services, incorporated in 2007, is a leading NBFC engaged in:
- Retail Lending: Personal loans, gold loans, business loans, auto loans.
- LAP & SME Financing: Significant portfolio from Tier 2 & 3 cities.
- Collections & BPO Services: Via subsidiary operations for third-party clients.
As of March 2025, HDB operated ~1,350 branches across 950 cities, with an employee base of over 40,000.
Key Financial Metrics (FY25)
| Particulars | FY25 | FY24 | YoY Change (%) |
|---|---|---|---|
| Total Income | Rs 16,480 crore | Rs 14,900 crore | +10.6 |
| Net Profit | Rs 2,250 crore | Rs 1,875 crore | +20.0 |
| Gross NPA | 3.1% | 3.8% | Improved |
| Net NPA | 1.6% | 2.2% | Improved |
| AUM | Rs 86,000 crore | Rs 78,000 crore | +10.3 |
| ROE | 14.2% | 12.8% | +140 bps |
Market Expert Commentary
Motilal Oswal Financial Services:
“HDB Financial’s strong distribution network, granular retail book, and low net NPA profile make it a high-quality NBFC. We expect loan growth to accelerate to 15-17% CAGR over FY25-28 as the economy expands.”
Edelweiss Securities:
“Post listing, valuations appear reasonable. HDB trades at 2.1x FY25 book value, at a discount to Bajaj Finance (7x) and Cholamandalam Finance (4.2x), offering re-rating potential if profitability improves.”
Why Did HDB Financial Shares Rally On Listing?
- Strong Parentage: As a subsidiary of HDFC Bank, HDB benefits from brand credibility, access to capital, and managerial expertise.
- Improving Asset Quality: NPAs have steadily declined post-COVID, reflecting effective risk management.
- Diversified Product Portfolio: Well-spread exposure across secured and unsecured retail loans.
- Stable Profitability: Consistent net profit growth of ~20% CAGR in last three years.
NBFC Sector Outlook
| NBFC Segment | Growth Drivers | Outlook (FY26) |
|---|---|---|
| Personal Loans | Urban consumption recovery | Strong |
| Business Loans | MSME credit gap, formalisation | Robust |
| Gold Loans | Rural liquidity needs | Stable |
| Vehicle Loans | Auto sector revival | Improving |
Analysts expect the NBFC sector to grow at ~14-15% CAGR till FY28, driven by economic expansion, consumer credit demand, and financial inclusion push.
Peer Comparison
| Company | AUM (Rs crore) | FY25 Net Profit (Rs crore) | Gross NPA (%) | ROE (%) | P/BV (FY25) |
|---|---|---|---|---|---|
| HDB Financial | 86,000 | 2,250 | 3.1 | 14.2 | 2.1x |
| Bajaj Finance | 2,10,000 | 13,500 | 1.5 | 21.0 | 7.0x |
| Cholamandalam Finance | 1,45,000 | 3,800 | 2.2 | 19.4 | 4.2x |
| Shriram Finance | 1,85,000 | 5,400 | 6.1 | 15.7 | 1.6x |
Source: Company filings, brokerages
Future Strategic Plans
- Branch Expansion: Targeting 1,500 branches by FY27 to deepen presence in semi-urban and rural markets.
- Digital Lending Growth: Strengthening tech platforms for faster disbursements and low-cost operations.
- Capital Efficiency: Improving leverage and cost-to-income ratios via operational optimisation.
Analyst Recommendations
| Brokerage | Recommendation | Target Price (INR) | Key Rationale |
|---|---|---|---|
| ICICI Securities | Buy | 1,380 | Strong growth, attractive valuation |
| Axis Capital | Hold | 1,250 | Awaiting further clarity on margins |
| Kotak Institutional | Buy | 1,420 | Declining NPAs, high parent synergy |
Risks Ahead
- Competition From Banks & Fintechs: NBFCs face pricing pressures amid aggressive digital lending platforms.
- Interest Rate Volatility: Rising rates could increase cost of funds and compress margins.
- Regulatory Tightening: RBI norms on NBFC asset classifications and provisioning could impact profitability if not managed prudently.
Investor Sentiment
Investor appetite for high-quality financial services IPOs remains robust in 2025, as seen from recent strong listings like:
| Recent NBFC IPOs (2025) | Listing Premium (%) |
|---|---|
| Aavas Financiers FPO | +9.6 |
| Five Star Business Finance | +11.2 |
| HDB Financial | +13.0 |
Conclusion
HDB Financial’s listing at a 13% premium underscores market confidence in its retail-focused lending model, strong parentage, and improving asset quality. While near-term re-rating will depend on loan growth acceleration and digital transition, long-term prospects remain bright amid India’s credit boom and NBFC sector expansion.
As FY26 approaches, investors will closely watch earnings momentum, cost control, and competitive positioning to assess HDB Financial’s journey from a stable lender to a market leader in the retail NBFC segment.
Disclaimer:
This news content is based on public market data, company filings, and brokerage research. It is meant for informational purposes only and does not constitute investment advice. Readers are advised to consult SEBI-registered financial advisors before making any investment decisions.
