HDFC Bank, the country's largest private sector lender, is getting ready to list its non-banking finance company (NBFC) HDB Financial Services (HDBFS). At Rs 12,500 crore, this will be the largest initial public offering (IPO) in the NBFC space so far, and it will be the first public issue for the HDFC Group in about six years.
The public issue includes up to Rs 10,000 crore worth of stake that HDFC Bank intends to sell in HDBFS and the NBFC will also raise Rs 2,500 crore through a fresh issue of shares. HDFC Bank received approval from its board of directors for the IPO on Saturday.
"The IPO will be for such number of equity shares of face value of Rs 10 each of HDBFS aggregating up to Rs 12,500 crore comprising of a fresh issue of such number of equity shares of face value of Rs 10 each of HDBFS aggregating up to Rs 2,500 crore and an OFS (offer for sale) of such number of equity shares of face value of Rs 10 each of HDBFS aggregating up to Rs 10,000 crore," the lender said in a stock exchange filing.
The price and other details of the proposed IPO are to be determined in due course.
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HDFC Bank currently holds 94.5 per cent stake in HDBFS and the NBFC will continue to be its subsidiary even post the IPO. Reserve Bank of India had come out with norms in 2022, which mandated NBFCs in the upper layer to list on stock exchanges. The listing of HDBFS follows those norms.
HDBFS is a non-deposit taking NBFC and offers a range of secured and unsecured loans to its customers. It has over 1,747 branches across 27 states and four union territories.
Separately, its BPO services division delivers back office services such as forms processing, document verification, finance and accounting services. It also delivers front office services like contact center management, outbound marketing and collection services.
For the quarter ended September 30, HDBFS reported a profit after tax of Rs 590 crore on revenue of Rs 2,410 crore. The total loan book of the NBFC was at Rs 98,600 crore as of September 30, 2024.
Currently, apart from HDFC Bank, HDFC Life Insurance and HDFC Asset Management are listed on the stock exchanges. HDFC Bank shares were trading 3.3 per cent higher on Monday at Rs 1,737 on the BSE, even as the broader BSE Sensex was down over 170 points or 0.2 per cent. HDFC Life Insurance was up 0.7 per cent at Rs 747.70 and HDFC Asset Management was down 0.5 per cent at Rs 4,687.85.
