HDB Financial Will Navigate Credit Cycle In Unsecured Business, Says CEO After Market Debut
After listing, CEO G Ramesh said the focus now will be on corporate governance and delivering the right value to shareholders over the long term.
HDB Financial Services Ltd. will navigate through the current credit environment in the unsecured business and play out the slowing economic cycle, the shadow lender's top executive said on Wednesday.
"We are independent of HDFC Bank. On unsecured business, we will play out the cycles as they come. We are confident of managing through a credit environment in the unsecured business," G Ramesh, chief executive officer and managing director, said at a press conference.
Speaking to NDTV Profit, Ramesh said the NBFC business goes through cycles, and so the company has a product portfolio approach to pursue business in those sectors of the economy that are likely to do well in 12-18 months to ride out these cycles.
India's economy is expected to grow below 7% this year, raising concerns over demand for everything from two-wheelers to consumer electronics. HDB Financial provides loans for such categories.
Listing Cheer
After a blockbuster IPO, shares of HDB Financial Services listed at a premium of nearly 13% on the stock market. The stock opened at Rs 835 on the NSE and BSE, compared to the issue price of Rs 740.
Ramesh said the listing price is a validation of their business model. He also said the company has met the regulatory requirement of a minimum 25% free float. Parent HDFC Bank will continue to own 74%.
The CEO said the focus now will be on corporate governance and delivering the right value to shareholders over the long term.
HDB Financial Services listed at a premium of nearly 13% on the stock market. (Photo source: NDTV Profit)
During the listing ceremony, HDFC Bank Chief Executive Officer and Managing Director Sashidhar Jagdishan said the subsidiary's listing will provide it with independent capital and visibility.
"Today, HDB Financial Services stands ready to start a new chapter as a publicly traded entity. Our kid has become an adult," Jagdishan said at the NSE building in Mumbai.
The listing will provide HDB with the independent capital and visibility it needs to accelerate its growth trajectory, pursue new opportunities and further solidify its position in the market, he said. "The ringing of the bell today brings the company to a larger scale with new milestones to aim for and to achieve."
