There is a buzz that the much anticipated HDB Financial Services IPO is likely to be launched by the end of June. This eagerly awaited Rs 12,500 crore IPO has already got the green light from the market regulator, SEBI. While there is no clarity on the actual issue date yet, what’s very clear is that the IPO will be one of the largest IPO in the NBFC space.
The unlisted shares of HDB Financial Services have seen a sharp spike in the price in the last 1 month to Rs 1,250 per share from Rs 950 a share ahead of the formal announcement of the IPO date. Experts believe the easing of rule for transaction of unlisted shares has been a key reason for the recent spike and demand for these shares.
HDB Financial Services IPO: Issue size
The HDB Financial Services IPO will be a bookbuilt issue and a combination of fresh shares worth Rs 2,500 crore and offer for sale amounting to Rs 10,000 crore.The promoter, HDFC Bank will be diluting its stake in this NBFC. The issue date and issue price are yet to be announced.
Is HDB Financial owned by HDFC Bank?
One of the key questions about HDB Financial is who owns the company. Yes it is part of the larger HDFC Group and a is a subsidiary company of HDFC Bank. That makes HDFC Bank the promoter of the company.
Lending and BPO are the two main business for the company. It is accredited with Care AAA & Crisil AAA ratings for its long-term debt and bank facilities and an A1+ rating for its short-term debt & commercial papers, making it a strong and reliable financial institution.
HDB Financial Services IPO objective
As we clearly understand, the HDB Financial services IPO has two component- the offer for sale and fresh issuance of shares. The money raised from the fresh issuance, about Rs 2,5000 crore, will be used boost the NBFC’s Tier-I capital base.
The DRHP elaborates that the capital augmentation will support future growth and help increasing the asset base along with expanding the overall lending activity.
A part of the fund raised would also be used for IPO related expenses including costs incurred for the various marketing, legal and regulatory processes. Typically this cost is shared between the promoter and the company.
The money raised through the offer for sale will go to the promoter directly diluting stake.
HDB Financial Services IPO: Who are the lead managers?
According to the DRHP, the list lead managers comprises 12 investment banks. These include JMFinancial, BNP Paribas, Bofa Securities India, Goldman Sachs (India) Securities, HSBC Securities & Capital Markets, IIFL Capital Services, Jefferies India, Morgan Stanley Motilal Oswal Investment Advisors, Nomura Financial Advisory And Securities (India), Nuvama Wealth Management and UBS Securities India.
Meanwhile, MUFG Intime India (Link Intime) is the registrar for the issue.