HDB Financial Shares Make Strong Debut at 13% Premium. What Next?

The moment which most investors were waiting for is done and dusted! HDB Financial shares listed at a decent premium of about 13% over its IPO price on the National Stock Exchange (NSE) on Wednesday, 2 July 2025. 

Shares of HDB Financial Services listed at Rs 835 per share on the NSE, a premium of 12.8% over its issue price of Rs 740 per share. On the BSE too, the shares were listed at Rs 835 apiece. 

HDB Financial Intraday Chart

Source: NSE

The listing of the subsidiary of HDFC Bank was better than what the grey market premium (GMP) was indicating. Ahead of its listing, the GMP was indicating a 8-10% listing gain.

Post listing, the total market cap of the company stood at Rs 69,758 crore.

With this, HDB Financial Services has quickly climbed the ranks to become the eighth most valuable non-banking financial company (NBFC) in India by market capitalisation.

What HDB Financial’s Managing Director Said Post Listing

Post listing, HDB Financial Services Managing Director G Ramesh said the listing price is a validation of their business model. 

“We are independent of HDFC Bank. On unsecured business, we will play out the cycles as it comes. Confident of managing through a credit environment in the unsecured business,” he said at a press conference.

After a successful debut, the focus will now be on corporate governance and delivering the right value to shareholders over the long term, he added.

Commenting on the growth and credit cycles, he said that NBFC businesses go through cycles and HDB 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. 

Post listing, HDB Financial has met the regulatory requirement of a minimum 25% free float. Its parent HDFC Bank continues to own 74% stake.

A Quick Glance at the Biggest IPOs in India

The IPO of HDB Financial was India’s biggest in 2025 so far, with investors bidding for more than 15 times the shares on offer.

The company sold shares which lured interest from global funds such as those managed by Morgan Stanley and Allianz SE, as well as from domestic institutions like Life Insurance Corp. of India.

HDB’s IPO is the biggest since Hyundai Motor India’s record $3.3 billion deal in October 2024.

Company Background

HDB Financial Services is one of India’s leading diversified, retail-focused Non-Banking Financial Companies (NBFCs). As a subsidiary of HDFC Bank, India’s largest private sector bank, HDB benefits from strong parentage and brand equity. 

The company’s primary business is lending, supplemented by business process outsourcing (BPO) services and fee-based products. It derives majority of the revenues from its lending business.

As of FY25, it operates 1,771 branches across 1,170 towns and cities, with over 80% of branches located outside India’s top 20 cities, indicating a deep penetration into Tier 2, 3, and 4 markets.

Source: DRHP

Competitive Strengths of HDB Financial

HDB enjoys a number of key competitive strengths:  

• Distinguished Parentage: HDB Financial Services benefits from the strong backing of HDFC Bank, India’s largest private sector bank. This association enhances trust, brand recognition, and corporate governance—offering a major edge in customer acquisition and stakeholder confidence.
• Large and Diversified Portfolio: HDB has a robust pan-India presence with over 80% of branches located in Tier 2, 3, and 4 cities. It combines physical outreach with digital tools, supported by a large network of over 1.45 lakh channel partners, enabling effective customer sourcing even in underbanked regions.
• Pan-India Distribution Network: HDBFS has a robust pan-India presence with over 80% of branches located in Tier 2, 3, and 4 cities. It combines physical outreach with digital tools, supported by a large network of over 1.45 lakh channel partners, enabling effective customer sourcing even in underbanked regions.
• Strong Asset Quality: Despite serving riskier customer segments like MSMEs and lower-income groups, the company has maintained Gross Stage 3 NPAs at just 1.90% as of March 31, 2024. This reflects its sound underwriting and efficient collections framework.
• High-Quality Liability Franchise: Backed by a CRISIL AAA/Stable rating and its HDFC Bank lineage, HDBFS accesses funds from multiple channels—banks, capital markets (NCDs, commercial papers), and External Commercial Borrowings (ECBs). This diversified funding base helps keep borrowing costs low and ensures consistent access to capital, even in tight liquidity conditions—supporting stable and scalable growth.

What Lies Ahead for HDB Financial?

NBFCs like HDB usually cater to borrowers who are either overlooked or excluded by traditional banks due to limited credit history or lower income levels. This makes them a vital part of India’s financial ecosystem. 

Their business model is expected to benefit in the current environment, as the RBI looks to boost economic activity through interest rate cuts and increased liquidity.

With a loan book nearing $12 billion, HDB Financial Services has built a strong nationwide presence through its network of over 1,700 branches and a workforce of nearly 90,000 employees.

However, as competition intensifies and asset quality risks linger, investors would do well to keep a watchful eye on the road ahead.

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