HDB Financial Services Limited IPO: 10 Key Things to Know Before Investing

HDB Financial Services Limited (HDBFS) is a well-established non-banking financial company (NBFC) with a focus on retail lending. Backed by its promoter HDFC Bank, the company has created a strong pan-India network with over 1,770 branches spread across 31 states and union territories.

The company serves a large and rapidly growing customer base, particularly in underserved markets, and offers diversified products across enterprise lending, asset finance, and consumer finance. Its “phygital” distribution model combines physical branches with digital channels, offering customers both accessibility and convenience. With a strong track record of profitability and growth, HDBFS is poised to benefit from rising credit demand in India’s growing economy. 

Here are the key details of the IPO:

• IPO dates: June 25 - 27, 2025

• Listing date: July 2, 2025

• Price band: ₹700 - ₹740 per share

• Total issue size: ₹12,500 Cr (₹2,500 Cr Fresh Issue + ₹10,000 Cr OFS)

• Face value: ₹10 per share

• Listing Exchange: BSE, NSE

• Lot Size: 20 Shares

• Promoter: HDFC Bank Limited 

The minimum investment required to apply for the HDB Financial Services IPO is ₹14,000, based on the lot size of 20 shares at the lower price band of ₹700 per share. However, to improve your allotment chances, you may consider applying at the upper price band, which would require ₹14,800 (20 shares at ₹740 per share).

Founded in 2007, HDB Financial Services Limited offers a wide range of retail lending products and business support services across India.

• Services: Offers loans to MSMEs, individuals, and vehicle owners under Enterprise Lending, Asset Finance, and Consumer Finance.

• Distribution: Operates via a “phygital” model-combining physical branches with digital tools.

• Reach: Operates across 1,170 towns and cities, with over 80% of branches in non-metro areas.

   

In addition, the company also provides BPO services like back-office support and sales services, primarily to its promoter, HDFC Bank. 

The primary objectives of the HDB Financial Services IPO are:

• To augment the company’s Tier-I capital base to support future capital requirements, including onward lending in its core business verticals.

• A portion of the proceeds will be allocated to cover offer-related expenses.

• The Offer for Sale (OFS) also allows existing shareholders to monetize their investments. 

While the final allocation may be subject to regulatory guidelines, IPOs typically have the following reservation structure:

• QIB Shares Offered: Not less than 44.92% of the Issue

• Retail Shares Offered: Not more than 31.44% of the Issue

• NII (HNI) Shares Offered: Not more than 13.48% of the Issue

• Employee Shares Offered: Not more than 0.16% of the Issue

• Shareholders Shares Offered: Not more than 10.00% of the Issue 

Strengths:

• Strong promoter support from HDFC Bank.

• Well-diversified and granular loan book.

• Extensive branch network in underserved regions.

• Strong technology-backed credit underwriting and collection systems.

• Proven profitability with consistent growth across business cycles.

Risks:

• Gross Stage 3 Loans (NPAs) have increased to 2.26% (FY25), up from 1.90% (FY24).

• Any delays in provisioning for bad loans may impact financial health.

• Risk of asset-liability mismatches in the future, which may affect liquidity and profitability.

• Sensitivity to changes in interest rates and regulatory guidelines affecting NBFCs. 

Here’s a snapshot of the company's recent financial performance (in ₹ Cr): 

• Basis of allotment: June 30, 2025

• Refund initiation: July 1, 2025

• Shares credited to demat accounts: July 1, 2025

• Listing date: July 2, 2025 

HDB Financial Services brings together the strength of its parent HDFC Bank, a large presence in underserved regions, and a robust business model. Its consistent financial performance, diversified lending operations, and digital-first expansion strategy make it an attractive option for investors looking to gain exposure in India’s growing retail credit market.

However, one should consider the risks associated with rising NPAs and potential liquidity challenges. Assess your financial goals and risk appetite before applying.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Please consult your financial advisor before investing.