The largest lender, HDFC Bank-backed HDB Financial Services IPO has emerged as the most subscribed billion-dollar IPO in 4 years. On June 27, the HDB IPO closed, and it received a whopping 16.69x, making it the best-performing IPO since Zomato in the large-size IPOs category. This financial services provider is expected to be a game changer in the NBGC sector.
HDB Financial Services IPO Subscription Status:
The IPO opened on June 25 and closed on June 27. The price band was fixed at Rs 700 to Rs 740 per share. On the final day of subscription, HDB Financial Services received bids of 16.69x, with strong buying from qualified institutional buyers (QIBs) whose portion was oversubscribed by 55.47 times.
The non-institutional investors (NIIs) and retail individual investors (RIIs) portion subscribed 9.99 times and 1.41 times, respectively. The retail investors showed lower demand compared to others.
However, at 16.69x oversubscription, HDB is now the best-performing IPO since Zomato.
From January 2021 to June 2025, HDB is the fourth largest IPO in size, but the largest in the NBFC sector. Hyundai IPO which released last year, is the biggest IPO in India as of now, followed by LIC in 2022 and Paytm in 2021. The Zomato IPO was launched in 2021.
However, except for Zomato, IPOs of Hyundai, LIC and Paytm saw below 3x subscriptions until HDB Financial Services.
At present, the latest grey market premium (GMP) of HDB hints at a single-digit premium listing. As per Investor Grain, HDB Financial IPO's last GMP is Rs 54, last updated Jun 27th 2025 09:31 PM. With a price band of 740.00, HDB Financial IPO's estimated listing price is Rs 794 (cap price + June 27 GMP). The expected percentage gain/loss per share is 7.30%.
Why HDB is a game changer for the NBFC sector.
"The ₹12,500 crore HDB Financial Services IPO marks a pivotal moment for India's NBFC sector - not just as the largest NBFC debut to date, but as a test case for how public markets value diversified lenders in an era of tightening regulations and evolving credit demand. Coming at a time when RBI is pushing large NBFCs toward listing (with a September 2025 deadline), this IPO represents both a regulatory compliance exercise and a strategic coming-of-age for HDFC Bank's 17-year-old shadow lending arm, " said, Tarun Singh, MD and Founder, Highbrow Securities.
The timing is telling! Singh explained that with credit growth outpacing GDP expansion and NBFCs capturing 40% of new retail loans, HDB's public listing offers a calibrated entry point into India's formalization of credit.
Here are key factors highlighted by Singh about HDB Financial Services:
Sector Significance: Beyond the HDFC Halo
HDB's IPO crystallizes three critical trends in Indian finance. First, it underscores the RBI's push to bring systemically important NBFCs (like HDB, classified in the "upper layer") under greater market discipline through public listings. Second, it highlights how banks are reluctantly reducing stakes in lucrative NBFC subsidiaries ahead of anticipated ownership caps. Third, and most importantly, the offering serves as a referendum on whether generalist NBFCs can command premium valuations in a market that increasingly rewards niche lenders.
The company's "phygital" model - blending 1,700+ semi-urban branches with digital underwriting - positions it uniquely to serve India's next wave of credit customers. With 80% presence in tier 2-4 towns and a loan book split between MSMEs (40%), asset financing (37%), and consumer credit (23%), HDB has built what might be India's most diversified NBFC portfolio. Yet this very diversification presents a valuation conundrum: at 3.5x P/BV, it trades at par with sector averages but significantly below specialists like Bajaj Finance (5.9x). The market appears to be pricing HDB as a steady compounder rather than a high-growth disruptor - a fair assessment given its 14% RoE (down from 18% pre-pandemic) and deliberate post-COVID shift toward conservative lending.
Timing the Tide: Cyclical Sweet Spot or Regulatory Compulsion?
The IPO's June launch coincides with a Goldilocks period for NBFCs - credit growth remains robust at 15%+, asset quality metrics have normalized post-pandemic, and risk appetite is returning to rural markets. However, beneath these favorable conditions lurk structural challenges: rising cost of funds (HDB's NIMs compressed 30 bps in FY24), increasing competition from new-age fintechs, and the perennial volatility of unsecured lending (27% of HDB's portfolio).
HDFC Bank's decision to monetize part of its 94% stake through a Rs 10,000 crore OFS while retaining 74% ownership suggests cautious optimism - they're taking money off the table but maintaining skin in the game. The fresh ₹2,500 crore capital infusion will strengthen HDB's tier-1 capital adequacy (currently at 16.8%), providing ammunition to chase growth while maintaining healthy buffers. For investors, the key consideration isn't whether HDB is a good company (its 2.26% GNPA and 23% CAGR loan book growth confirm it is), but whether it can translate its HDFC lineage and pan-India presence into superior returns in a maturing market.
In many ways, HDB's IPO represents the NBFC sector's transition from its "wild west" days to a more regulated, institutional phase. Its performance post-listing will reveal much about the public market appetite for steady, diversified lenders in an environment where specialists often steal the spotlight. The company's fate won't just belong to its shareholders but will serve as a barometer for the entire NBFC sector's next chapter.
HDB Financial Services IPO Allotment & Listing:
The allotment status is fixed on June 30, 2025, while the tentative listing date is expected on July 2.
HDB Financial Services (HDBFS) is a leading Non-Banking Financial Company (NBFC) that caters to the growing needs of an Aspirational India, serving both Individual & Business Clients.
Incorporated in 2007, HDB is a well-established business with strong capitalization. HDBFS is accredited with CARE AAA & CRISIL AAA ratings for its long-term debt & Bank facilities and an A1+ rating for its short-term debt & commercial papers, making it a strong and reliable financial institution.
Disclaimer: The write-up is just for information purposes, and is not a recommendation to buy, sell or hold. We have not done fundamental or technical analysis and have no opinion on article mentioned. Neither, the author, GoodReturns.In nor Greynium Information Technologies should be held liable for any losses. Please consult a professional advisor.
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