HDFC Bank may start IPO process of HDB Financial Services soon

HDFC Bank reported a 2.65%  rise in consolidated net profit of ₹17,258 crore for the October-December period against ₹16,811 crore in the preceding September quarter.

HDFC Bank's chief financial officer Srinivasan Vaidyanathan underlined that the bank has time till September 2025 to list HDB Financial Services, the in-house non-bank finance company, Vaidyanathan said preparatory work on the IPO will begin shortly. 

HDB Financial Services Ltd (HDBFSL), in which the HDFC Bank holds a 94.7% stake, is a non-deposit-taking NBFC offering wide a range of loans and asset finance products. For the quarter ended December 31, 2023, HDBFSL's net revenue was at 23.5 billion as against 22.3 billion for the quarter ended December 31, 2022, a growth of 5.0%. 

Profit after tax for the quarter ended December 31, 2023 was 6.4 billion compared to ₹ 5.0 billion for the quarter ended December 31, 2022, a growth of 27.1%. Profit after tax for the nine months ended December 31, 2023 was 18.0 billion compared to 14.1 billion for the nine months ended December 31, 2022. The total loan book was 840 billion as on December 31, 2023 compared to 651 billion as on December 31, 2022, a growth of 29.0%. Stage 3 loans were at 2.25% of gross loans. As on December 31, 2023, total CAR was at 18.0% with Tier-I CAR at 14.5%.

The private lender, which had 8,091 branches as of December 2023, wants to grow the network to over 13,000 branches in the next five years, the CFO said, adding that it will add 1,000 branches in the next year alone.

Amid the regulatory concerns on unsecured lending, the bank's growth in personal loans and credit cards has been much lower than the system, he said, adding that the RBI move on risk weights has impacted the overall capital position by nearly 1 percentage point.