HDB Financial Services IPO: Subscribe For Long-Term, Caution On Short-Term Gains, Says SEBI RA

The analyst views the offering as better suited for long-term investors given strong fundamentals, premium valuations and HDFC Bank’s backing.
Stack of coins and IPO wooden blocks.
Stack of coins and IPO wooden blocks. (Photo: Dev Images via Getty Images)
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Deepti Sri·Stocktwits
Updated Jul 02, 2025   |   8:31 PM EDT
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HDB Financial Services, the retail lending arm of HDFC Bank, opened its ₹12,500 crore initial public offering (IPO) for subscription on Wednesday, with a price band of ₹700–₹740 per share. 

 Its grey market premium stands at ₹74–₹75 per share, about 10% above the upper price band. [

SEBI-registered analyst Mayank Singh Chandel called it the biggest IPO of the year and said the company is India’s seventh-largest retail-focused NBFC. 

The issue size includes ₹2,500 crore as fresh equity and ₹10,000 crore as an offer for sale. The company is valued at 3.72x its FY24 book value, in line with listed peers like Bajaj Finance and Shriram Finance. 

Its expected market capitalization post-listing is estimated at ₹58,205 crore to ₹61,388 crore.

Chandel said the company operates in enterprise lending, consumer finance, and asset finance, with a loan book of ₹90,220 crore as of March 2024. 

It is classified as an “Upper Layer NBFC” by the RBI and has a debt-to-equity ratio of 5.85x.

The analyst said strong fundamentals, governance, and HDFC Bank’s credibility support the business. However, Chandel also flagged that the IPO is not cheap, which makes it more suitable for long-term investors. 

He listed two key risks: first, the RBI may require HDFC Bank to cut its stake in HDB below 20%, and second, high valuations could limit near-term upside.

According to him, investors looking only for listing gains may want to avoid the IPO. 

While short-term returns may be capped, Chandel believes that the brand value of HDFC and HDB’s platform offer long-term investment merit.

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