HDB Financial Services Share Price Falls Below IPO Price — What Led To The Decline
The stock has declined nearly 12% since its results for Q1FY26 came out in which NPAs and credit costs inched up and provisions impacted profitability.
HDB Financial Services Ltd. found itself on thin ice on Monday after the newly listed company's stock went 1.4% below its IPO price of Rs 740 on August 4.
Troubles began for the company after it reported its first-ever earnings as a listed company on the exchanges on July 15, in which its gross and net non-performing assets both rose.
The Non-Banking Financial Company's IPO was met with heavy investor confidence, partly because it is the lending arm and a wholly-owned subsidiary of HDFC Bank. Another reason being that the Rs 12,000-crore IPO was the fifth-largest issue so far in India, following the public offers of Hyundai Motor India, LIC, One97 Communications (Paytm's parent), and Coal India.
The stock has declined nearly 12% since its results for Q1FY26 came out in which NPAs and credit costs inched up and provisions impacted profitability.
The NBFCs' Gross NPA ratio came at 2.56% versus 2.26%, up 30bps QoQ, and Net NPA ratio came at 1.11% versus 0.99%, up 12bps QoQ. Moreover, the bank's Credit cost was at 2.5% versus 2.4%, up 10bps QoQ.
The scrip fell as much as 1.35% to Rs 738.25 apiece. It pared losses to trade 1% lower at Rs 740 apiece, as of 12:07 a.m. This compares to a 0.43% advance in the NSE Nifty 50 Index.
It has fallen 11% since its listing on July 2. The relative strength index was at 27.
Only one analyst is tracking the company and they maintain a 'buy' rating, for the stock according to Bloomberg data. The average 12-month consensus price target implies an upside of 21.5%
