HDB Financial IPO Kicks Off With Buzz, Size, and a Touch of Nervousness

India’s biggest NBFC IPO in years opens as retail, institutional, and grey market players scramble to decode its real worth

The much-hyped ₹12,500 crore initial public offering of HDB Financial Services opened for bidding on Wednesday, setting the stage for one of the most-watched financial events of the year.

It’s big, it’s bank-backed, and it’s drawing serious attention. But behind the market chatter and headline numbers, there’s plenty of nuance investors are chewing over.

Backed by HDFC Bank, Built for the Long Haul

HDB Financial is no fly-by-night NBFC. It’s a key subsidiary of HDFC Bank, holding the latter’s long-time ambition of growing in the semi-urban and retail lending space.

The IPO is split between a ₹2,500 crore fresh issue and a ₹10,000 crore offer for sale by parent HDFC Bank, which currently holds over 94% of HDB’s equity. After this issue, HDFC’s stake will drop significantly, but it’ll still stay the promoter.

This deal isn’t just a financial event—it’s strategic. It’s about unlocking value ahead of what many believe will be a massive NBFC consolidation wave post-merger season.

Price Band, GMP, and the Not-So-Hidden Gap

The IPO is priced between ₹700 and ₹740 per share. But that’s not what early grey market investors are still reeling from.

Unlisted shares of HDB had hit ₹1,250 levels before the IPO dates were confirmed. That’s a near 70% drop in notional value compared to the grey market buzz six months ago.

One pre-IPO investor, speaking on condition of anonymity, summed it up bluntly: “We were expecting listing around ₹1,100. Now, we’re just praying it lists above ₹800.”

• Price Band: ₹700 – ₹740 per share
• GMP (June 25 morning): Around ₹75-₹80
• Pre-IPO grey market price (early 2024): ₹1,200 – ₹1,250
• Fresh issue size: ₹2,500 crore
• Offer for Sale: ₹10,000 crore by HDFC Bank

So, while retail investors see this as a discount to the unlisted hype, it still looks expensive to some old-timers. Sentiment is cautiously optimistic.

Why This IPO Really Matters for India Inc.

Let’s zoom out for a second.

This isn’t just another NBFC going public. HDB’s IPO is:

• The biggest NBFC issue in at least five years

• The 5th largest IPO in India over the last two decades

• A major test of institutional demand post-LIC and Paytm

• Closely watched by rating agencies and private equity firms

Here’s how it stacks up with other recent IPO heavyweights:

HDB’s business spans personal loans, gold loans, auto financing, and enterprise lending. It’s profitable. Its NPAs are under control. But it still faces real competition—from banks, fintechs, and even mutual funds targeting small borrowers through credit lines.

Risks Investors Are Quietly Watching

HDB Financial operates under the HDFC brand—but it doesn’t own it. That’s licensed, and that’s a sticking point.

If HDFC Bank ever changes its brand strategy, or if RBI comes down hard on NBFC-bank overlaps, things could get complicated.

Then there’s the valuation question. Analysts have flagged that the price band implies a multiple of 3.5x adjusted book, which isn’t cheap by any stretch.

One institutional buyer said, “We love the franchise, but the valuation leaves little room for error. It’s all baked in.”

Also, there’s a bit of concern about loan growth in Tier 2 and Tier 3 towns, where demand has cooled post-election spending.

Who’s Bidding, Who’s Waiting, and Who’s Watching

Retail interest was visible from the opening bell. Brokers say the IPO received bids within minutes of going live, with high activity in HNI and online platforms like Zerodha and Groww.

But insiders suggest QIB demand will be key.

One fund manager tracking the deal broke it down simply:

• Retail: Excited but cautious

• HNIs: Chasing potential 10–15% listing pop

• QIBs: Still evaluating valuation vs SBI Cards, Bajaj Finance

It’s worth remembering: in 2020, SBI Cards listed at a discount despite huge retail oversubscription. And Paytm’s spectacular flameout still haunts the Street.

That said, investors also remember the clean success stories like IRFC and LIC eventually recovering ground.

What Happens After June 27?

Post-close, allotment is expected around July 2 or 3. Listing is likely to happen on or around July 5.

Here’s what matters after the dust settles:

• If the listing is strong, HDFC may be encouraged to push similar listings of other subsidiaries.

• A weak debut could send a chill across other NBFCs planning an IPO.

• Market sentiment, oil prices, and global flows will dictate medium-term trends.

There’s hope, but also hesitation. And that’s the mood across Dalal Street this week.