Highlights: HDB Financial Services ends Day 1 as 8th largest NBFC after strong debut, market cap near Rs 70,000 crore

HDB Financial Services, which debuted on the stock exchanges today with a 13% listing premium, ended the day on a positive note. On the BSE, the stock settled at Rs 840.90, up 0.71%. On the NSE, it closed at Rs 840.25, marking a gain of 0.63%.

HDB Financial Services is categorised as an upper-layer NBFC by the Reserve Bank of India. It is the 4th largest diversified retail-focused NBFC (by Gross Loan Book size) as of March 2025. It is a subsidiary of HDFC Bank, which is the largest private sector bank in India in terms of total assets as of March 2025. The company’s Assets Under Management (AUM) stood at Rs 1,07,300 crore as of March 2025. HDB Financial Services offers a diversified portfolio of products through its 3 business verticals.

Listing was in line with expectations, reflecting strong investor appetite. The IPO garnered over Rs 1.61 lakh crore in bids, underscoring massive institutional and retail interest. This makes HDB’s offering the second most subscribed IPO among Rs 10,000+ crore issues, trailing only the record-breaking Tata Technologies listing. However, it did fall short of surpassing the all-time high Rs 3 lakh crore+ subscription seen in the Bajaj Housing Finance IPO.

“We believe the robust response signals market confidence in HDB’s business model, parentage (as an HDFC group company), and long-term growth potential in the NBFC space. If the listing meets expectations, it would reaffirm investor appetite for high-quality financial services plays, especially those backed by trusted legacy institutions,” said Prashanth Tapse, Senior Vice President of Research at Mehta Equities.

“The company has demonstrated consistent growth, with a 22–29% YoY increase in AUM and a 24% rise in its customer base. However, profitability has come under pressure due to higher provisioning and a rise in Stage-3 assets (NPAs). HDB’s strong parentage, diversified retail loan book, and extensive distribution reach are key strengths, though its return metrics currently trail top-tier peers,” said Bajaj Broking in its report.

“HDB Financial have built a pan-India hybrid presence, comprising over 1,771 physical branches across more than 1,170 towns and cities in 31 States and Union Territories as of March 31, 2025, supported by a digitally enabled distribution network through both in-house and third-party channels. They intend to further diversify their funding sources by expanding and strengthening their lender base, with the goal of optimizing leverage and reducing the average cost of borrowings,” said Anand Rathi in its report.

“Listing was in line with our expectations, reflecting strong investor appetite. The IPO garnered over Rs 1.61 lakh crore in bids, underscoring massive institutional and retail interest. This makes HDB’s offering the second most subscribed IPO among Rs 10,000+ crore issues, trailing only the record-breaking Tata Technologies listing. However, it did fall short of surpassing the all-time high Rs 3 lakh crore+ subscription seen in the Bajaj Housing Finance IPO,” said Prashanth Tapse, Senior VP (Research), Mehta Equities.

“We believe the robust response signals market confidence in HDB’s business model, parentage (as an HDFC group company), and long-term growth potential in the NBFC space. If the listing meets expectations, it would reaffirm investor appetite for high-quality financial services plays, especially those backed by trusted legacy institutions,” he added.

HDB Financial Services shares were trading higher at this hour, up 1.7% on the BSE at Rs 848.95 apiece. On the NSE, the stock was quoting at Rs 849.45, a gain of 1.73%.

Bajaj Finance continues to hold the crown as the most valuable NBFC, commanding a market cap of over Rs 5.81 lakh crore. It is followed by Jio Financial Services at Rs 2.08 lakh crore and Cholamandalam Investment & Finance at Rs 1.37 lakh crore.

HDB now joins the elite list that also includes Shriram Finance, Muthoot Finance, SBI Cards, and Aditya Birla Capital – each with market capitalisations ranging between Rs 72,000 crore and Rs 1.33 lakh crore.

HDB Financial Services shares were trading flat after listing at a premium on the National Stock Exchange on July 02. The IPO was listed on the bourses at a premium of 13% to its issue price. The shares of HDB Financial Services were up 0.52% to trade at Rs 839.

HDB Financial Services made a strong debut on Dalal Street, listing at a 13% premium over its issue price. With this listing, the company has quickly climbed the ranks to become the eighth most valuable non-banking financial company (NBFC) in India by market capitalisation.

One hour after its listing, HDB Financial Services shares were trading flat at 11 am. On the BSE, the stock was trading at Rs 835.55, up just 0.55 points. On the NSE, it was quoting at Rs 835.25, up 0.25 points.

“The Company has been able to grow its AUM and Pre-Provisioning Operating Profit (PPoP) at a 23.7% and 12.9% CAGR over FY23-25, respectively, compared to the peer average of 25.3% AUM growth and 19.4% PPoP growth. We expect that its AUM and disbursement will witness higher growth compared to FY25, led by higher urban and rural consumer demand driven by government’s intervention in reducing income tax rates, RBI’s efficient inflation management and expected cuts in GST rates for the overall consumption basket,” said Deven Choksey Research in its report.

“The RBI’s Oct-24 draft circular demands no overlap in business between the bank and its subsidiary. If this is adopted, then HDFC Bank might have to reduce its ownership in HDBFS to under 20% within a specified duration,” said the brokerage firm Emkay in its report.

HDB Financial Services made a strong debut on the stock market today, with its shares listing at Rs 835 on both the NSE and BSE, up 12.84% from the issue price of Rs 740.

As of September 30, 2024, the company’s gross loan book reached Rs 98,620 crore, growing at a healthy CAGR of 21% since FY22. Its assets under management (AUM) stood at Rs 90,230 crore, while net profit surged to Rs 2,460.8 crore in FY24, up from Rs 1,620 crore two years ago. On the profitability front, HDB posted a strong return on assets (ROA) of 3.03% and return on equity (ROE) of 19.55%, with net interest margins (NIMs) comfortably above 7%. Asset quality also remained robust, with gross NPAs at 1.90% and net NPAs at a low 0.63%, backed by a 61% provision coverage ratio.

HDB Financial runs a multi-layered business model that blends lending with business process outsourcing. Its lending arm is structured into three key segments, each catering to a different set of borrowers. The first, Enterprise Lending, focuses on small businesses and professionals, offering both secured and unsecured loans for working capital, equipment purchases, or office upgrades. The second stream, Asset Finance, helps transporters and contractors fund commercial vehicles, tractors, and other income-generating equipment without dipping into their own capital. The third, Consumer Finance, provides short-term loans for everyday needs like smartphones, appliances, and two-wheelers.

Emkay Global has initiated coverage on HDB Financial with a ‘Buy’ rating and a target price of Rs 900, highlighting the company’s strong fundamentals and growth potential. According to the brokerage, HDB has the right mix of strategic clarity, sound execution, and a favourable external environment that supports its expansion. Emkay expects the company to deliver a robust 20% CAGR in assets under management (AUM) and a 27% CAGR in earnings per share (EPS) between FY25 and FY28.

HDB Financial’s mainboard IPO is backed by a consortium of leading domestic and global investment banks. The list of Book Running Lead Managers (BRLMs) reads like a who’s who of the financial world – BNP Paribas, JM Financial, BofA Securities, Goldman Sachs India, HSBC Securities, IIFL Capital, Jefferies India, Morgan Stanley, Motilal Oswal, Nomura, Nuvama Wealth, and UBS Securities. Handling the crucial backend work such as application processing, refunds, and share allotments is MUFG Intime India Private Limited (Link Intime), the designated registrar for the issue.

As HDB Financial’s much-awaited IPO gears up for its listing today, the grey market is showing signs of optimism. As per the latest update, the company’s shares are trading at a premium of Rs 68, suggesting a possible listing price of around Rs 808. This indicates an expected gain of 9.19% over the issue price of Rs 740. However, it is important to note that this is only an indicative estimate, actual listing levels may vary depending on market sentiment and demand at the opening bell.

Also Read: HDB Financial Services listing today: GMP up 10%, will it spark a rally on debut?

The bidding for HDB Financial’s Rs 12,500 crore IPO opened on June 24 and closed on June 27, with strong participation across investor categories. The allotment of shares was finalised on June 30, and the much-anticipated listing is scheduled for today, July 2, on both the BSE and NSE.

HDB Financial’s Rs 12,500 crore IPO turned out to be a blockbuster, drawing massive interest across all investor categories. The overall subscription stood at 16.69 times. The Qualified Institutional Buyers (QIBs) led the charge, bidding a 55.47 times their allotted quota. Non-Institutional Investors (NIIs) also showed interest, subscribing 9.99 times. Even retail investors, despite their cautious approach, subscribed 1.41 times. Employees weren’t far behind, with their portion subscribed 5.72 times, while the HDFC Bank shareholder category saw a 4.26 times subscription.

Over 70% of branches are located in Tier 4+ towns. Their customers mainly comprise salaried and self-employed individuals, as well as business owners and entrepreneurs. Their Secured loans represent 73% of the Total Gross Loans, and unsecured loans represent 27% of the Total Gross Loans as of March 31, 2025. Their diversified product

Portfolio serves multiple credit needs of customers across three business verticals.

Despite broader market uncertainties driven by geopolitical tensions, the strong institutional participation underscores confidence in HDB’s solid fundamentals and long-term growth potential. “This IPO sets a strong precedent, reinforcing the company’s positioning as a key NBFC player under the HDFC group umbrella,” said Mehta Equities in a pre-listing note. The mainboard IPO received a strong response from all set of investors on the last day of the IPO, getting oversubscribed by over 17.65x times. There was the strongest interest from Qualified Institutional Buyers (QIBs) and Non-Institutional Investors (NIIs) while retail remained cautious with 1.51x oversubscription, which shows retail investors are concerned about the history of big block IPOs listing and post-list performance.

“We believe an overwhelming demand for the IPO was driven by reasonable ask valuation, offering healthy long-term upside potential along with a well-diversified product portfolio across Retail lending, Asset financing and Enterprise finance: loans for SMEs. We also see the company’s strategic positioning to benefit from the liquidity push from the RBI, especially with a high focus on SME NBFC growth,” said Prashanth Tapse, Senior Vice President of Research at Mehta Equities.

After years of anticipation, HDB Financial Services is finally set to debut on the Indian stock exchanges, and early indicators point to a healthy 8–10% listing gain, reflecting strong investor appetite. The IPO garnered over Rs 1.61 lakh crore in bids, underscoring massive institutional and retail interest. This makes HDB’s offering the second most subscribed IPO among Rs 10,000+ crore issues, trailing only the record-breaking Tata Technologies listing. However, it did fall short of surpassing the all-time high Rs 3 lakh crore+ subscription seen in the Bajaj Housing Finance IPO.

The HDB Financial IPO has been among the one of the most anticipated IPOs of 2025. Decidedly the largest this year and the biggest NBFC issue, it is the 5th largest IPO in 2 decades. The pricing of the IPO issue has sparked a lot of discussion. This is because at Rs 740 a share, even the higher end of the price band is at a 50% discount to the price quoted for the unlisted shares before the IPO launched. The issue is right now fetching a grey market premium of 10-11% indicating a sharp rally on debut.

HDB Financial Services will be listed on the exchanges, NSE and BSE, today. The grey market premium indicates that the stocks might make a positive debut to their issue price, as they were fetching a premium of 9.6%. This means the stocks were trading Rs 71 higher than the issue price at Rs 811. HDB Financial IPO kept the issue price at Rs 740 per equity share.