HDB Financial Services Limited, a firm backed by HDFC Bank, has submitted its draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (SEBI) in for an initial public offering (IPO).
Company offers a wide variety of loan products aimed at a growing and varied customer base through a comprehensive omni-channel distribution system. Its loan categories fall into three main areas: Enterprise Lending, Asset Finance, and Consumer Finance.
HDB Financial primarily targets customers who have limited access to banking services, focusing on low to middle-income families with minimal or no credit history.
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Issue DetailsThe proposed public offering will raise ₹12,500 crore, comprising a new equity share issue of ₹2,500 crore and an offer for sale (OFS) of up to ₹10,000 crore from HDFC Bank Limited, identified as the “Promoter Selling Shareholder.” Each equity share will have a face value of ₹10.
The non-banking financial company (NBFC) intends to utilize the funds generated from the new share issuance to bolster its tier – I capital base, addressing future financial requirements related to lending, which will be fueled by business growth.
This public offering will also reserve a portion of equity shares for eligible employees and create a dedicated allocation for qualifying HDFC Bank shareholders with a nominal value of ₹10 each (referred to as the “HDFC Bank shareholder reservation portion”).
The lead managers overseeing 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. The CRISIL Report highlights that HDB Financial ranks among the largest and fastest-growing customer franchises in India, having served 17.5 million customers by September 30, 2024, which translates to a compound annual growth rate (CAGR) of 28.22% from March 31, 2022, to September 30, 2024.
5 Reasons why HDB financial can be a good option for LONG TERM INVESTORS
- Backed by strong HDFC group.
- Order book is very stable.
- Penetration in Tear 4 cities where competition is very less.
- NIM(Net interest margin) is very promising.
- NPA is very less(around 0.63) which is very good for an NBFC, as more than 70% of the loans provided are secured.
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