The problem has two components:

• New share issue of ₹2,500 crore
• Offer For Sale (OFS) of ₹10,000 crore by HDFC Bank to reduce its holding from about 94% to about 74%

Highlights of IPOs

• IPO open: June 25, 2025
• IPO close: June 27, 2025 
• Price band:Price band: 700-740 (Rs) per equity share (of face value of Rs 10 each)
• Minimum lot size: 20 shares (214800)
• Listing date: Anticipated July 2, 2025 in BSE and NSE

The Reason Behind Why It Is the Most Expected IPO

1. Enormous Size

It is the largest NBFC IPO in India in 2025 and one of the largest ever market offerings at 12500 crores.

2. Firm Promoter Backing

The IPO, which was supported by the other parent company that is the HDFC Bank, also received 3,369 crore anchor bids or overseas, including the Black Rock, India Life Insurance Company (LIC), and the Norwegian Sovereign wealth fund-booked at 740 rupees per share (upper band).

3.  The Good Grey Market Sentiment

Grey market premium (GMP) up to about 74-75 or/ 10% premium over upper price band- which shows high precedence of investor interest.

Business Strength & Financial Health

• Loan book: ₹1.06 lakh crore as of March 31, 2025 .
• Net profit FY 25: ₹2,176 crore (vs ₹1,359 crore in FY24) .
• Asset quality: Gross NPA ~2.49%, Net NPA ~1.38%—healthy for an NBFC.
• Branch network: Approximately 1,700+ branches in 1,200+ towns and cities, mostly outside metros .

Valuation & Market Comparisons

• P/B ratio: About 3.7x at the top end of the band, aligned with peers like Bajaj Finance and Shriram Finance.
• ROE: ~14.7%, which is reasonable though slightly behind top-tier peers like Bajaj .
• Financials: Revenue grew ~15%, with ~12% profit decline in FY25—though still strong overall .

Use of IPO Proceeds

All ₹2,500 crore fresh equity proceeds will bolster Tier‑1 capital, helping HDB:

• Expand lending, especially to MSMEs
• Meet RBI’s capital norms
• Support future business growth

The ₹10,000 crore from OFS goes to HDFC Bank—not HDB itself.

Risks & Considerations

1. Reliance on HDFC Branding
   Although HDB stands on its own, its branding is derived from HDFC Bank. Brand value may be impacted by any change in licensing.
2. Unsecured Loans
   ~29% of its portfolio is unsecured loans—more risk for credit defaults if economic conditions take a downturn.
3. Grey Market Speculation
   GMPs at around ₹80 may be hype—but actual listing will depend on real retail demand as well as market conditions..
   
   
4. Macro Conditions
   If the interest rates or the wider markets are weak, retail demand could be weak.

Analyst & Broker Views

• SBI Securities, Centrum, Bajaj Broking, Deven Choksey have "Subscribe" ratings—mentioning robust fundamentals and fair valuation.
  
• Peer comparison indicates HDB is priced conservatively compared to larger names .

How to Apply in IPO

• Bid between ₹700–740 per share
• Apply in lots of 20 shares (₹14,800 minimum investment)
• Open June 25–27
• Basis of allotment: June 30
• Listing: July 2, 2025

Eligible categories include retail, institutional, HDFC Bank shareholders, employees, and QIBs/NIIs – quotas apply.

Should You Invest?

Advantages:

• Supported by HDFC Bank
• Strong financial health
• Reasonable valuation relative to peers
• Strong institutional and retail interest

Disadvantages:

• Exposure to unsecured loan
• High GMP may fizzle
• Have to monitor economic conditions

If you're a long-term player with a focus on financials and growth, HDB can work. If you're short-term or GMP-oriented, wait for real listing performance.

Summary

Final Word

The HDB Financial Services IPO is among 2025's largest and most discussed public issues. With a clear balance sheet, robust promoter, and positive valuation, it is a strong case for long-term investors. However, be wary of its unsecured loan book and how real market interest pans out after the listing.

Stay with us for more updates. Visit our website for more information.