Upcoming IPO: HDB Financial IPO launch likely by June-end: Report

Upcoming IPO: HDB Financial Services IPO is expected to hit the primary market by the end of June, Moneycontrol reported, citing sources on Monday, June 16.

According to the Moneycontrol report, the updated draft red herring prospectus (UDRHP) has been submitted, with plans to file the red herring prospectus in the coming days, and the anchor segment is scheduled for June 24. Currently, it is anticipated that the issue will be available for public subscription from June 25 to June 27.

HDFC Bank shares rose 1% in trade today following reports of its subsidiary gearing for a Dalal Street listing as soon as June-end.

The report also added that HDB Financial Services is allegedly aiming for a post-money valuation of about $7.2 billion (roughly ₹62,000 crore) at the higher end of the pricing range.

Earlier this month, the capital markets regulator SEBI approved HDB Financial Services' ₹12,500 crore IPO, the largest ever by a non-banking financial company (NBFC) in India.

HDB Financial IPO details

The IPO features a fresh issue of ₹2,500 crore and an offer for sale (OFS) of ₹10,000 crore from its parent company, HDFC Bank, which currently possesses a 94.3% stake in HDB.

The listing is mandated by regulations, as Reserve Bank of India’s (RBI) directive from October 2022 requires all "Upper Layer" NBFCs to be listed on stock exchanges.

According to RBI regulations, all NBFCs in this category are required to go public within three years of the notification, with a deadline of September this year.

Moreover, should the RBI's draft circular of 2024 concerning similar business overlaps be enacted, HDFC Bank might need to either lower its stake in HDB Financial to 20%, merge the two entities, or separate their services, according to the report.

The proceeds from the IPO will be used to bolster Tier-1 capital, fulfil future capital needs, such as further lending, and adhere to capital adequacy regulations.

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