A subsidiary of banking giant HDFC Bank, HDB Financial Services, which has filed its DRHP with SEBI, has finally received approval to launch its IPO worth ₹12,500 crore through an Initial Public Offering (IPO).
The IPO consists of a mixture of a fresh issue of ₹2,500 crore and an offer for sale (OFS) of ₹10,000 crore by the parent company HDFC Bank.
Currently, HDFC Bank holds a 94.3% stake in the company. As per the CNBC-TV18 report, the investors can expect the IPO to be launched by May 27.
As per the RBI’s guidelines issued in October 2022, the company HDB Financial Services must be required to list its shares in the stock market through an IPO within three years from the date of filing the DRHP, as HDB Financial falls under the “Upper Layer” non-banking financial companies.
If the RBI’s 2024 draft rules come into effect, then the HDFC Bank will be left with no option but to choose one out of 3 options, which are either to reduce its stake in HDB Financial at up to 20%, combine the two companies, or completely separate their business activities.
The proceeds raised from the fresh issue will be utilized in order to strengthen Tier-1 Capital, in order to meet the future requirements, and making sure that the company has enough capital as required by the rules.
HDB Financial Services was founded in 2007, known to provides loans and business process outsourcing (BPO) services to individuals and businesses. The company has quickly grown to over 1,747 branches across 27 states and 4 union territories. It offers a wide range of secured and unsecured loans, along with investment and insurance services, making it a one-stop solution for customers’ financial needs.
In FY24, the company generated a total revenue of ₹141,711.2 million from operations. While the (PAT) Profit After Tax also rose by ₹33,046.7 Million in FY24.
HDB Financial Services IPO Prospectus:
| DRHP Draft Prospectus: | Click Here |
| RHP Draft Prospectus: | To be Updated Soon |
HDB Financial Services Company Financial Report
Amount ₹ in Crores
| Period Ended | Revenue | Expense | Profit After Tax |
| 2022 | ₹11,306.29 | ₹9,958.73 | ₹1,011.40 |
| 2023 | ₹12,402.88 | ₹9,775.48 | ₹1,959.35 |
| 2024 | ₹14,171.12 | ₹10,866.45 | ₹2,460.84 |
HDB Financial Services IPO Valuation – FY2024
HDB Financial Services IPO valuations detail like Earning Per Share (EPS), Price/Earning P/E Ratio, Return on Net Worth (RoNW), and Net Asset Value (NAV) details.
| Earning Per Share (EPS): | ₹31.08(Basic) |
| Price/Earning P/E Ratio: | N/A |
| Return on Net Worth (RoNW): | 19.55% |
| Net Asset Value (NAV): | ₹173.3 |
Peer Group Comparison
| Company | EPS | PE Ratio | RoNW % | NAV | Income |
| Bajaj Finance Limited | 236.89 | 29.8 | NA | 1239.0 | 5,49,694.9 Cr. |
| Sundaram Finance Limited | 130.31 | 36.2 | NA | 997.1 | 72,671.2 Cr. |
| L&T Finance Limited | 9.34 | 15.5 | NA | 94.2 | 1,35,805.8 Cr. |
|
Mahindra
&
Mahindr
Services Limited |
15.66 | 17.8 | NA | 161.3 | 1,57,968.5 Cr. |
|
Cholamandalam
Investment and Finance Company |
41.17 | 31.5 | NA | 233.1 | 1,91,396.2 Cr. |
| Shriram Finance Limited | 196.32 | 16.7 | NA | 1302.5 | 3,63,795.2 Cr. |
Objects of the Issue
- Gross proceeds of the Fresh Issue
- (Less) Fresh Issue expenses
IPO Lead Managers aka Merchant Bankers
- JM Financial Limited
- BNP Paribas
- BofA Securities India Limited
- Goldman Sachs (India) Securities Private Limited
- HSBC Securities and Capital Markets (India) Private Limited
- IIFL Securities Limited
- Jefferies India Private Limited
- Morgan Stanley India Company Private Limited
- Motilal Oswal Investment Advisors Limited
- Nomura Financial Advisory and Securities (India) Private Limited
- Nuvama Wealth Management Limited
- UBS Securities India Private Limited
