HDFC Bank shares hit 52-week high on ₹22 dividend and banking sector rally

Shares of HDFC Bank Ltd surged to a fresh 52-week high on Wednesday, climbing 0.78% to ₹1,995.60 on the BSE by 10:51 am IST. The rally is being attributed to a mix of strong investor sentiment following the launch of HDB Financial Services’ IPO, an attractive dividend announcement, and positive technical momentum in the banking sector.

The scrip opened firm and quickly gained ground, touching an intraday high of ₹1,996.90 by 10:48 am, before showing some consolidation. The bank’s market capitalisation also saw a healthy rise as investors reacted positively to recent developments.

IPO trigger

A key driver behind the stock’s rise is the initial public offering of HDB Financial Services, a non-banking finance company (NBFC) and subsidiary of HDFC Bank. The IPO, launched on 25 June, aims to raise ₹12,500 crore and includes a ₹10,000 crore offer-for-sale component by the bank. Notably, ₹1,250 crore worth of shares have been reserved for existing HDFC Bank shareholders, which has further boosted retail interest in the parent company.

Market analysts said the IPO reflects the bank’s confidence in unlocking value from its subsidiaries and could improve its return on equity in the medium term.

"The company has demonstrated consistent growth, with a 22–29% YoY increase in AUM and a 24% rise in its customer base. However, profitability has come under pressure due to higher provisioning and a rise in Stage-3 assets (NPAs). HDB’s strong parentage, diversified retail loan book, and extensive distribution reach are key strengths, though its return metrics currently trail top-tier peers," stated the Bajaj Broking report.

Dividend appeal

Adding to investor enthusiasm is HDFC Bank’s final dividend of ₹22 per share for FY25. To be eligible, shareholders must buy the stock by Wednesday, 26 June. This has triggered a wave of demand from dividend-chasing investors, supporting the stock ahead of its ex-dividend date.

The banking sector as a whole is also seeing renewed buying interest amid expectations of strong credit growth and robust Q1 FY26 earnings. HDFC Bank, being a sector leader, has benefited from this positive sentiment.

With a combination of corporate action, market momentum, and investor-friendly initiatives, HDFC Bank appears well-positioned for continued strength in the near term.