HDB Financial IPO: SEBI May Clear HDFC Subsidiary's Public Issue This Week, Say Sources

The Securities and Exchange Board of India's nod for HDB Financial Services Ltd.'s initial public offering is expected in the next few days, sources told NDTV Profit on Tuesday.

The clearance from the market regulator may come as soon as this week, the persons privy to the matter said.

The primary issue related to the IPO, of a large number of private shareholders, is settled, they said, noting that SEBI was concerned about the number of HDB Financial shares being traded in the private market.

Bloomberg News was the first to report that the upper-layer non-banking financial company was close to getting a SEBI nod for its IPO.

HDB Financial, notably, is a subsidiary of HDFC Bank. HDFC Bank owns 94.6% stake in HDB Financial Services. After fundraising from the primary market, HDB Financial Services will continue to be its subsidiary, the private lender had said in October 2024.

HDB Financial Services is going for the initial public offer as the Reserve Bank of India mandated that large non–banking financial services companies are required to be listed on the exchanges by September 2025.

HDB Financial Services will use the proceeds from the fresh issue to bear some of the expenses of the initial public offer. Most of the amount will go in augmenting its Tier I capital base, for future capital requirements, and onward lending rising from the growth of the business, the company said in the DRHP.

HDB Financial Services will consider pre–IPO placement after consulting with the lead book running managers in case they opt for the option.

The company is yet to take a decision about the offer price, price band, minimum bid size and will determine these in consultation with the lead book running managers, the DRHP said. Its shares will be listed both on the National Stock Exchanges and BSE after the offer concludes.

For the March quarter, HDB Financial reported a 19% year-on-year fall in net profit, which came up to Rs 531 crore on a standalone basis. Sequentially, the bottom line grew 12%.

The company's top line also saw a 16% growth over the same quarter a year ago, with total revenue from operations rising to Rs 4,266 crore. Interest income jumped 18% to Rs 3,623 crore.

The year-on-year bottom-line decline was observed despite an income tax credit of Rs 60 crore, mainly on the back of higher expenses, which rose 28% to Rs 3,562 crore.

In April, another upper layer NBFC, Tata Capital Ltd., had confidentially filed draft papers for its $2 billion IPO, in line with the RBI mandate. The Tata Capital IPO is expected to comprise a fresh issue of 23 crore equity shares and an offer-for-sale by certain existing shareholders.

NDTV Profit has reached out to HDFC Bank and SEBI for comments on the story.