HDFC Bank arm HDB Financial’s IPO sees 16.7x subscription, QIBs surge past 55x

HDFC Bank subsidiary HDB Financial Services has garnered an overwhelming response from domestic as well as foreign investors for its ₹12,500 crore ($1.5 billion) initial public offering (IPO). The biggest IPO of the year was subscribed 16.69 times on the final day of bidding as it received bids for more than 217.67 crore shares, against the offer size of 13.04 crore shares, BSE data showed. With this, HDB Financial has become the most subscribed billion-dollar IPO since Zomato-parent Eternal's public issue in 2021, which was subscribed over 29 times.

The HDB Financial Services IPO received a strong response from all three segments of investors, led by qualified institutional buyers (QIBs) as the quota reserved for them was booked 55.47 times. The portion set aside for non-institutional investors was booked 9.99 times and that of retail investors was subscribed 1.41 times. The portion reserved for employees was booked 5.72 times, while that reserved for shareholders was subscribed 4.26 times.

The IPO, being offered at a price band of ₹700-740 per equity share, was a combination of a fresh issue of 3.38 crore shares worth ₹2,500 crore and offer for sale (OFS) of 13.51 crore shares by promoter entity HDFC Bank. Ahead of the opening of the issue, the NBFC had raised ₹3,369 crore from anchor investors.

HDFC Bank, which held a stake of around 94.36% in HDB Financial Services before the IPO, will reduce its stake worth around ₹10,000 crore to around 74.19% via OFS. This stake sale is being seen as unlocking value for HDFC Bank.

The successful launch and of the IPO, especially given the market's view on its valuation, has created a positive sentiment around HDFC Bank, say market watchers. Analysts believe it signals an improvement in both fee-based and non-fee-based income streams for HDFC Bank going forward.

This is the largest IPO since Hyundai Motor India’s ₹27,000-crore issue last year and the first by a HDFC Bank group entity after the merger of HDFC with HDFC Bank in July 2023. After listing, HDB Financial will compete with the likes of Bajaj Finance, Sundaram Finance, L&T Finance, Mahindra & Mahindra Financial Services, Cholamandalam Investment and Finance Company, and Shriram Finance.

The allotment of shares to eligible applicants is expected to be finalised on June 30, while the shares of HDB Financial are expected to be listed on the bourses on July 2, 2025.

Established in 2007 as a subsidiary of HDFC Bank, HDB Financial Services has evolved into one of India’s largest NBFCs with a gross loan book of ₹1.07 lakh crore as of March 2025. The NBFC offers a wide variety of lending products, primarily catering to underbanked customers representing low to middle income households with minimal or no credit history.