Latest news with #HDBFinancialServices
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Business Standard
3 days ago
- Business
- Business Standard
HDB Financial's ₹12,500 cr IPO approved: Key risks, strengths you must know
HDB Financial Services IPO: HDB Financial Services, a subsidiary of India's largest private lender HDFC Bank, has received the approval from Securities and Exchange Board of India (Sebi) for its ₹12,500 crore initial public offering (IPO). The HDB Financial Services IPO comprises a fresh issue of ₹2,500 crore and an offer for sale (OFS) of ₹10,000 crore by parent HDFC Bank, which currently owns 94.3 per cent stake in the non-banking financial company (NBFC). The company had filed its papers for the IPO in October 2024. According to the DRHP, the company plans to use the net fresh issue proceeds for augmentation of its Tier-1 capital base to meet the company's future capital requirements including onward lending. Strong retail loan book: The company has a highly granular retail loan book, boosted by a large and rapidly growing customer base with a focus on serving the underbanked customer segments. It has served 17.5 million customers as of September 30, 2024, which grew at a CAGR of 28.22 per cent between March 31, 2022 and September 30, 2024. Robust credit processes: HDB Financial Services has built strong credit underwriting and collection systems, supported by a dedicated in-house team of around 4,500 professionals as of September 30, 2024. The credit team operates independently from the sales team, with clearly defined roles and no overlap in targets or responsibilities. This structure ensures disciplined risk management and supports sustainable growth. Strong backing from HDFC Bank: HDB Financial Services is a subsidiary of HDFC Bank, India's largest private sector bank with total assets of ₹36.88 trillion as of September 30, 2024. HDFC Bank has a strong presence across retail and commercial banking, asset management, insurance, and brokering. Founded in 1994 by HDFC Limited, which merged with HDFC Bank in 2023, HDFC Bank enjoys high trust and strong brand equity among consumers. ALSO READ | 3B Films IPO allotment today; check status, GMP, listing date Here are the key risks associated with investing in HDB Financial Services: Risks from economic slowdown: According to the DRHP, any downturn in the macroeconomic environment in India could adversely affect the company's business, results of operations, cash flows and financial condition. Risk of loan defaults: HDB Financial Services pointed out that 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. Unsecured loans: In addition, HDB's 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. Heavy dependence on promoter: HDB Financial Services is dependent on its parent. "However, the interests of the Promoter as our controlling shareholder may conflict with our interests or the interests of our other shareholders. Our Promoter may also be required to significantly reduce its ownership in our Company, which may have a material impact on our business operations and share price," the company said. Interest rate scenario: Any volatility in interest rates, could result in the decline of Net Interest Income (NII) and our Net Interest Margins (NIMs). Highly competitive environment: In a highly competitive lending services industry, the company's inability to compete effectively could adversely impact its business operations and financial condition. HDB Financial also said that "we may not be successful in implementing our growth strategies or sustaining our growth and financial performance at similar rates as experienced in recent years."
Mint
3 days ago
- Business
- Mint
HDFC Bank share price edges higher after SEBI's nod to HDB Financial Services IPO
HDFC Bank share price edged higher on Wednesday after the bank's subsidiary HDB Financial Services received SEBI approval to float initial public offering (IPO). HDFC Bank share price gained as much as 0.45% to ₹ 1,934.00 apiece on the BSE. Capital markets regulator, the Securities and Exchange Board of India (SEBI), has issued observations for the public issue of HDB Financial Services. In Sebi's parlance, obtaining observations means a go ahead to float the public issue. HDB Financial Services IPO will mark the HDFC group's first public issue in seven years. HDFC Bank holds 94.36% stake in HDB Financial Services, a non-banking financial company (NBFC). HDB Financial Services had filed for an IPO of up to ₹ 12,500 crore in October. HDB Financial Services IPO will be a combination of a fresh issue of equity shares worth ₹ 2,500 crore and an offer-for-sale (OFS) of ₹ 10,000 crore by promoter HDFC Bank, according to the draft red herring prospectus (DRHP). The company proposes to utilize the proceeds from the fresh issue to strengthen its Tier-I capital base. This will support future capital needs, including additional lending, to support business growth. HDB Financial Services IPO has been mandated by the new norms issued by the Reserve Bank of India (RBI) in 2022 that require large non-banking financial companies to be listed on stock exchanges by September 2025. HDB Financial Services reported a net profit of ₹ 530 crore for the quarter ended March 2025, while its net revenue was ₹ 2,620 crore. The company's total loan book was ₹ 1.07 lakh crore as of March-end. HDFC Bank share price has remained flat in one month and has risen over 12% in three months. The banking stock has gained 8% YTD, while it is up 30% in one year. HDFC Bank shares have rallied 20% in two years and have delivered 92% returns in the past five years. At 9:50 AM. HDFC Bank share price was trading 0.10% higher at ₹ 1,927.20 apiece on the BSE. Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
Time of India
3 days ago
- Business
- Time of India
HDFC Bank shares in focus after HDB Financial Services gets SEBI nod for IPO
HDFC Bank shares will be in focus on Wednesday after its subsidiary, HDB Financial Services, received approval from the Securities and Exchange Board of India (Sebi) for its proposed initial public offering (IPO). Sebi issued its final observations on the draft papers last week. A final observation from the regulator indicates clearance to proceed with the IPO. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Join new Free to Play WWII MMO War Thunder War Thunder Play Now Undo HDB Financial Services plans to raise Rs 12,500 crore through the IPO, which will include a fresh issue of Rs 2,500 crore and an offer for sale (OFS) worth Rs 10,000 crore by existing shareholders. As an upper-layer NBFC, the company is mandated to list by September 2025 under RBI guidelines. Proceeds from the fresh issue will be used to strengthen the company's Tier-I capital base. Also Read: Looking for reliable dividends? These 10 stocks stayed consistent through FY22–FY24 In addition to HDB, SEBI also approved IPO proposals from five other companies on Tuesday: Vikram Solar, A-One Steels India, Shanti Gold International, Dorf-Ketal Chemicals India, and Shreeji Shipping Global. Live Events So far in 2025, a total of 16 companies have launched IPOs, collectively raising Rs 27,687.32 crore from the public markets. Also Read: MRF snatches India's highest-priced stock crown back from Elcid Investments According to Trendlyne, the average target price for HDFC Bank is Rs 2,162, indicating an upside of around 12% from current levels. Of the 41 analysts covering the stock, the consensus recommendation is 'Strong Buy'. On Tuesday, HDFC Bank shares closed at Rs 1,925 on the BSE, down 0.4%, in line with the broader market trend. The benchmark Sensex declined 0.78% for the day. HDFC Bank shares have risen 13% over the past three months and gained 22% over the last 12 months. The bank's current market capitalisation stands at Rs 14.74 lakh crore. Also Read: India's top 10 priciest stocks in 2025: MRF to Elcid, see who tops the list ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
Mint
3 days ago
- Business
- Mint
HDB Financial gets regulator's nod for ₹12,500-crore IPO
HDB Financial Services Ltd, owned by HDFC Bank Ltd, has received the capital markets regulator's approval for a ₹ 12,500-crore initial public offering. The non-bank financier filed its draft red herring prospectus (DRHP) on 30 October, comprising a fresh issue of up to ₹ 2,500 crore and an offer for sale of up to ₹ 10,000 crore. The Securities and Exchange Board of India issued an observation letter to the lender on 28 May. The final set of Sebi observations is essentially an in-principle approval for the IPO, according to market participants. Typically, after a company files its DRHP, the regulator responds within 45 days. However, in this case, Sebi took about seven months. 'With these final observations in place, the company has a 12-month window to file its red-herring prospectus (RHP) and can launch the IPO anytime within that period,' said Vipin Singhal, director at Anand Rathi Investment Banking. While the IPO market is currently subdued, a number of deals are lined up and ready to go once market sentiment improves, Singhal added. So far this year, the Nifty 50 has risen just 3%. Parent HDFC Bank, which owns 94.32% of HDB Financial Services, will sell shares worth ₹ 10,000 crore via an offer for sale. Last week, Bloomberg reported that HDB Financial Services was nearing Sebi's approval for its IPO. The nod would allow the subsidiary of HDFC Bank, the country's largest private sector lender, to finally move forward with a deal that could raise up to $1.5 billion, following months of waiting for regulatory clearance. At $1.5 billion, it would be the largest IPO by a non-bank financial company (NBFC) in India and the biggest across sectors since Hyundai Motor India Ltd's $3.3 billion listing last year. South Korea's LG Electronics had planned to list its Indian unit in May but has reportedly delayed the IPO due to market volatility and valuation concerns. The $3.3-billion offering may now take place in the second or third quarter of the current fiscal year, depending on market conditions, as per reports. The proposed listing would also help HDB Financial Services meet a regulatory norm that mandated certain large non-bank financiers to go public. The Reserve Bank of India (RBI) in its 2021 guidelines said that upper-layer NBFCs must be listed within three years of being identified as one. The non-bank subsidiary of India's largest private lender HDFC Bank was among the 16 names listed by RBI in September 2022, effectively giving it time till September 2025 to get listed. RBI regulations classify NBFCs into four layers based on the size, activity and perceived risks. The upper layer comprises prominent names like Tata Sons Pvt, LIC Housing Finance Ltd and Shriram Finance Ltd. Established in 2007, HDB Financial has three primary verticals: enterprise lending, asset finance, and consumer finance. HDB Financial reported a net profit of ₹ 2,176 crore in FY25, down from ₹ 2,461 crore in the previous financial year. Its gross non-performing assets (NPA) ratio, though down from the highs seen three to four years ago, rose in 2024-25, showed data from its FY25 annual report. In FY25, the gross NPA — bad loans as a percentage of total loans — stood at 2.26% compared with 1.9% in FY24. 'With the economy projected to continue growing, the company, with its diversified product portfolio, broad reach through its network of branches across the country and its digital infrastructure, is cautiously optimistic in its outlook for FY 2025-26,' said its FY25 annual report. Mint reported in January that the markets regulator is examining a potential violation of the Companies Act by HDB Financial Services 17 years ago, as the non-bank lender prepares for a $1.5 billion IPO, citing three people aware of the matter. As per the report, Sebi found that the lender in 2008 issued shares to more than 50 employees of its parent HDFC Bank through a private placement. Under the Companies Act, issuing shares to more than 50 people is considered a public issue, requiring compulsory Sebi clearance.
Reuters
3 days ago
- Business
- Reuters
India's HDB Financial gets market regulator nod for IPO
MUMBAI/BENGALURU, June 3 (Reuters) - India's markets regulator, the Securities and Exchange Board of India (SEBI), has approved the initial public offering (IPO) of HDB Financial Services, marking the HDFC group's first public float in seven years. According to a document published on the SEBI website on Tuesday, the regulator issued observations on the public listing, allowing the company to proceed with its IPO, a source with direct knowledge of the matter said. SEBI and HDFC Bank ( opens new tab did not immediately respond to a Reuters request for comment. In October, HDB Financial filed for an IPO of up to 125 billion rupees ($1.5 billion). HDFC Bank, which holds a 94.3% stake in the lender, will sell shares worth up to 100 billion rupees, while fresh shares worth up to 25 billion rupees will be issued. HDB Financial's listing follows new norms introduced by the country's central bank in 2022 that require large non-banking financial companies to be listed on stock exchanges by September 2025. For the quarter ended March 31, HDB Financial Services posted a profit of 5.3 billion rupees, while its net revenue came in at 26.2 billion rupees. The company's total loan book was 1.07 trillion rupees as of March-end. ($1 = 85.6540 Indian rupees)
