HDB Financial IPO Day 1: Should You Subscribe? Here's What Brokerages Suggest

Brokerages are optimistic about the highly anticipated initial public offering of HDB Financial Services Ltd. The mainboard IPO opened for subscription on June 25. The Rs 12,500-crore IPO has been booked only 11% as of 11:25 a.m., as per NSE data. Here’s a look at key details about the HDB Financial IPO and what brokerages have to say about it:

Aditya Birla Money has given a positive rating to the IPO and emphasised its long-term potential.

“Its strong presence in semi-urban and underbanked markets, diversified and expanding loan portfolio, advanced digital capabilities, and robust financial performance underscore its compelling long-term investment potential,” the brokerage wrote in a research note.

SBI Securities has recommended that investors subscribe to the IPO. It underlined its strong parentage, access to low-cost and diversified borrowing sources, robust credit underwriting and collections.

“The company is well placed to register healthy growth going ahead, while witnessing an improvement in the asset quality. We recommend investors subscribe to the issue at the cut-off price,” the brokerage said. 

Centrum Broking has also given a subscribe rating to the issue. “We recommend a ‘subscribe’ rating to the issue, supported by: 1) A robust brand franchise and granular retail lending model, 2) A wide-reaching omni-channel (phygital) distribution platform, and 3) Access to low-cost funding anchored by a AAA-rated credit profile,” it said in a research note. 

The HDB Financial Services IPO is a book-building issue comprising a fresh issuance of 3.38 crore shares, amounting to Rs 2,500 crore, and an offer-for-sale of 13.51 crore shares, worth Rs 10,000 crore.

The price band for the IPO has been fixed between Rs 700 and Rs 740 per share. 

Retail investors can bid for a single lot size of 20 shares. This amounts to an investment of Rs 14,800. Small non-institutional investors have to bid for 14 lots comprising 280 shares, requiring an investment of Rs 2,07,200.  Big non-institutional investors can participate in the IPO by bidding for a minimum of 68 lots consisting of 1,360 shares. It requires a minimum investment of Rs 10,06,400.

The IPO subscription is open till June 27. The IPO share allotment status is expected to be finalised by the company on June 30. Successful bidders will receive shares in their demat accounts on July 1. Refunds to non-allottees will also be processed on the same day.

Shares of HDB Financial Services are expected to be listed on NSE and BSE on July 2. 

BNP Paribas, JM Financial Ltd., Bofa Securities India Ltd., Goldman Sachs (India) Securities Pvt., HSBC Securities & Capital Markets Pvt., IIFL Capital Services Ltd., Jefferies India Pvt., Morgan Stanley India Company Pvt., Motilal Oswal Investment Advisors Ltd., Nomura Financial Advisory And Securities (India) Pvt., Nuvama Wealth Management Ltd., UBS Securities India Pvt. are the book running lead managers of the HDB Financial IPO.

MUFG Intime India Pvt. is the registrar for the issue.

HBD Financial Services Ltd. is a leading non-banking financial company (NBFC). It’s a subsidiary of HDFC Bank. Following the IPO, HDFC Bank’s stake in its NBFC arm will be reduced to 74% from 94% earlier.