HDB Financial Services IPO: HDFC Bank arm to float ₹12,500-crore IPO; parent to offload ₹10k-crore shares via OFS

HDB Financial Services IPO: HDB Financial Services (HDBFS) Ltd, a subsidiary unit of India’s largest private sector lender—HDFC Bank, plans to raise ₹12,500 crore through an upcoming initial public offering (IPO). The parent firm HDFC Bank, which holds a 94.6 per cent in HDB Financial Services Ltd, will sell shares worth ₹10,000-crore via an offer-for-sale (OFS) as part of the IPO.

The Mumbai-based private lender's board on Saturday, October 19, approved the much-awaited IPO plans for its non-banking financial company (NBFC) arm, informing that the IPO price and other details of the proposed public issue will be determined in due course of time. HDB Financial Services Ltd will continue to be a subsidiary of HDFC Bank even after the conclusion of its IPO.

Also Read: HDB Financial IPO: HDFC Bank clears subsidiary’s IPO plan to raise ₹2,500 crore via fresh issue plus OFS

HDB Financial Services IPO Details

HDB Financial Services IPO will be a combination of a fresh issue and an OFS with its total issue size at ₹12,500 crore. According to HDFC Bank, the upcoming HDB Financial Services IPO will be for such number of equity shares of face value of ₹10 each, aggregating up to ₹12,500 crore comprising a fresh issue of ₹2,500 crore and the OFS aggregating up to ₹10,000 crore. 

"We wish to inform you that the Board of Directors of the Bank at its meeting held today i.e. on October 19, 2024, considered and approved the OFS of such number of equity shares of face value of ₹10 each of HDBFS aggregating up to ₹10,000 crore held by the Bank (subject to any revisions to such amount as may be permissible under applicable law), in the proposed IPO, subject to applicable law, market conditions, receipt of necessary approvals/ regulatory clearances and other considerations.

Also Read: Why HDFC Bank turned down MUFJ's overtures on HDB Financial

Accordingly, the IPO will be for such number of equity shares of face value of ₹10 each of HDBFS aggregating up to ₹12,500 crore comprising of a fresh issue of such number of equity shares of face value of ₹10 each of HDBFS aggregating up to ₹2,500 crore and an OFS of such number of equity shares of face value of ₹10 each of HDBFS aggregating up to ₹10,000 crore," said HDFC Bank in a regulatory filing to the stock exchanges today.

"The price and other details of the proposed IPO will be determined in due course by the competent body. Please note that post the proposed IPO, HDBFS would continue to be a subsidiary of the Bank, in compliance with the provisions of the applicable regulations," added HDFC Bank.

Last month, HDFC Bank approved raising ₹2,500 crore through an issue of shares in the IPO, marking the banking group's first public float in six years. After the proposed IPO, HDB Financial Services will continue to be a subsidiary of the bank, in compliance with the provisions of the applicable regulations.

Also Read: HDB Financial IPO in the works as HDFC sets stage to list NBFC arm

HDB Financial Services Details

Incorporated in 2007, HDB Financial Services provides secured and unsecured loans and has more than 1,680 branches across India. HDB Financial Services closed the June quarter with a net worth of about ₹13,300 crore. 

The listing of the NBFC follows the central bank's new norms. The decision to list HDB Financial Services follows the Reserve Bank of India (RBI)'s mandate in October 2022, requiring NBFCs in the upper layer to list on the stock exchanges.

Earlier today, HDFC Bank also announced its July-September quarter results for fiscal 2024-25 (Q2FY25), without any dividend. This quarter is the first time HDFC’s year-on-year (YoY) numbers are comparable after its merger with parent Housing Development Finance Corp (HDFC) was completed in July 2023. On Friday, shares of HDFC Bank settled 0.47 per cent higher at ₹1,681.15 apiece on the BSE.