Upcoming IPO: HDFC Bank’s NBFC arm HDB Financial Services files DRHP for IPO with SEBI

HDFC Bank promoted, HDB Financial Services Limited has filed its draft red herring prospectus (DRHP) with the capital market regulator, Securities and Exchange Board of India (SEBI), for an initial public offering (IPO).

HDB Financial Services Limited provides an extensive range of loan products designed to serve a diverse and expanding customer demographic via a broad omni-channel distribution network. The loan offerings are categorised into three business segments: Enterprise Lending, Asset Finance, and Consumer Finance.

The company mainly serves customers who are underserved and underbanked, targeting low to middle-income households with little to no credit history.

Issue Details

The public offer, totalling ₹12,500 crore, includes a new issue of equity shares amounting to ₹2,500 crore and an offer for sale (OFS) of up to ₹10,000 crore by HDFC Bank Limited, referred to as the "Promoter Selling Shareholder," with each equity share having a face value of ₹10.

The NBFC plans to use the net proceeds from the new issuance to strengthen the company’s tier – I capital base, to fulfill future capital needs related to lending, driven by the expansion of the business.

The public offering includes a reserved allocation of equity shares for eligible employees, as well as a separate reservation of equity shares with a face value of ₹10 each for qualifying HDFC Bank shareholders (“HDFC Bank shareholder reservation portion”).

The book running lead managers for the issue are JM Financial Ltd, BNP Paribas, BofA Securities India Ltd, Goldman Sachs (India) Securities Private Ltd, HSBC Securities and Capital Markets (India) Private Ltd, IIFL Securities Ltd, Jefferies India Private Ltd, Morgan Stanley India Company Private Ltd, Motilal Oswal Investment Advisors Ltd, Nomura Financial Advisory and Securities (India) Private Ltd, Nuvama Wealth Management Ltd, and UBS Securities India Private Ltd.

According to the CRISIL Report, the company ranks among the largest and rapidly expanding customer franchises in India, having served 17.5 million customers as of September 30, 2024, representing a compound annual growth rate (CAGR) of 28.22% from March 31, 2022, to September 30, 2024.

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