| Price | Lot Size | Issue Date | Issue Size |
|---|---|---|---|
| ₹ 700 to ₹ 740 | 20 | 25th Jun, 2025 – 27th Jun, 2025 | ₹12500 Cr |
HBD Financial Services Limited IPO
HDB Financial Services Limited (HDBFSL) is a retail-focused non-banking financial company (NBFC) incorporated in 2007 as a subsidiary of HDFC Bank Limited. As of March 31, 2024, the company ranked as the seventh largest NBFC in India in terms of total gross loan book, which stood at Rs. 902 billion. HDBFSL is classified by the Reserve Bank of India as an Upper Layer NBFC (NBFC-UL). The company operates through three main business segments: Enterprise Lending, Asset Finance, and Consumer Finance and serves a broad customer base through an omni-channel distribution model. Its gross loan book grew to Rs. 1,069 billion as of March 31, 2025, translating to a CAGR of 23.5% over FY23-FY25. During the same period, AUM grew at a similar pace to Rs. 1,073 billion. According to a CRISIL report, HDBFSL is the second-largest and third-fastest growing customer franchise among its NBFC peers for which data is available, serving 19.2 million customers as of March 31, 2025, with a customer base largely drawn from underserved and underbanked segments. The company has a significant presence in non-metro regions, with over 80% of its branches located outside the top 20 cities and more than 70% in Tier 4 and smaller towns. The loan book is granular, with the top 20 customers contributing less than 0.3% of total gross loans and an average ticket size of approximately Rs. 1,65,000. HDBFSL maintains a diversified funding profile and carries an AAA (stable) credit rating from CRISIL and CARE, with an average cost of borrowing at 7.9% as of March 31, 2025, reported to be the sixth lowest among its peers. As of March 31, 2025, HDBFSL’s loan portfolio was split across three segments: Enterprise Lending (39.3%) comprising secured and unsecured loans to MSMEs; Asset Finance (38.0%) consisting of secured loans for income-generating assets like commercial vehicles, construction equipment, and tractors; and Consumer Finance (22.7%) covering both secured and unsecured loans for consumer durables, vehicles, and personal loans.
Objective of the HBD Financial Services Limited IPO
The company proposes to utilize net proceeds (Rs. 25,000 million) towards funding the following objects:
- Augmentation of company’s Tier–I capital base to meet the company’s future capital requirements including onward lending under any of the company’s business verticals;
- To ensure compliance with regulatory requirements on capital adequacy prescribed by the RBI from time to time.
- Proceeds from OFS constitute of Rs. 1,00,000 million which will not be received by the company.
Rationale To HBD Financial Services Limited IPO
Diversified and business cycle-tested lending franchise with strong loan-book granularity
HDBFSL has established a well-diversified lending portfolio that spans Enterprise Lending, Asset Finance, and Consumer Finance, each catering to distinct borrower segments across business, income-generation, and personal consumption needs. As of March 31, 2025, no single product accounted for more than 25% of the total loan book, while 73% of the loans were secured by asset-backed collateral, underscoring a conservative lending approach. The company has demonstrated the ability to grow its book at scale while maintaining asset quality, with Gross Stage 3 loans at 2.26% and Net Stage 3 at 0.99% as of FY25, which is the fourth and fifth lowest amongst its peer set. Over the years, HDBFSL has weathered multiple economic and credit shocks, including the 2008 financial crisis, the IL&FS-induced NBFC liquidity crunch, and COVID-19, while maintaining profitability, suggesting a strong underlying risk and operational framework. The company’s focus on granular lending is also evident in its low borrower concentration, with the top 20 customers contributing less than 0.34% of gross loans and an average ticket size of approximately Rs. 165,000, helping limit event-based credit risks.
Integrated, phygital distribution and risk architecture enables scalable growth
HDBFSL’s growth strategy is underpinned by an integrated distribution model that combines a physical branch-led presence with expanding digital and third-party channels. As of March 31, 2025, the company operated over 1,770 branches across 31 states and union territories. The company has a clear emphasis on underpenetrated markets, evidenced from over 80% of its branches located outside the top 20 cities, and more than 70% in Tier 4+ towns. This extensive network is complemented by over 140,000 dealer and retail touchpoints and partnerships with over 80 OEMs and brands, providing strong sourcing channels for both secured and unsecured products. Digital capabilities, including a customer-facing app with 9.2 million downloads, fintech tie-ups, and digital underwriting, enable faster turnaround and cost efficiencies. Operationally, HDBFSL maintains a clear separation between credit and sales functions, with dedicated underwriting and collections teams. As of FY25, over 95% of loans were underwritten digitally, and digital or banking channels accounted for over 95% of collections. The company’s structured credit risk framework, supported by custom scorecards, bureau integrations, and centralized monitoring tools enable dynamic portfolio management. Strategically, HDBFSL plans to deepen product offerings, improve cross-sell, and diversify funding sources, including tapping international borrowings (USD 1.1 billion ECBs in FY25), to enhance growth while managing funding costs. These capabilities position it to expand profitably while navigating the structural challenges in India’s retail credit landscape.
Valuation of HBD Financial Services Limited IPO
HDBFSL is the seventh largest leading NBFC in terms of total gross loan book. The company is also the second largest and third fastest growing customer franchise amongst its peers. Bolstered by its diversified product offerings, strong geographical presence across India, technology backed rapid turnaround times and strong customer service, the company is well positioned to meet the demand of the various customer categories, particularly in the deeper pockets of the nation. Given its granular, collateral-backed loan book and strong presence in underpenetrated Tier 3 and Tier 4 markets, HDBFSL is well-positioned to tap into the rising credit demand from India’s expanding lower- and middle-income segments. Its hybrid distribution model, backed by digital capabilities and deep OEM partnerships, offers the scale and flexibility needed to serve these evolving customer needs efficiently. As credit penetration continues to rise across rural and semi-urban India, the company stands to benefit from structural economic tailwinds, driving consumption and enterprise financing. Financially, the company has reported a steady topline CAGR of 14.6% between FY23 and FY25. On the return front, HBDFSL has reported ROA at 2.1% in FY25 (vs 2.7% in FY24), while ROE declined from 17.9% in FY24 to 14.6% in FY25. GNPA and NNPA both increased from 1.9% and 0.6% in FY24 to 2.3% and 1.0% in FY25, respectively, as a result of slippages and write-offs during the fiscal. Despite the relatively lower return ratios and profitability growth, we remain optimistic of the company’s longer-term growth trend supported by a strong brand parentage, diversified liability franchise supported by a strong credit rating of AAA and a pan-India presence. The issue is valued at a P/B ratio of 3.9x at the upper price band based on FY25 book value, which we believe to be fairly valued compared to its peers. Considering the above compelling factors, we recommend a “SUBSCRIBE” rating to this issue from a long term perspective.
What is the HBD Financial Services Limited IPO?
The initial public offer (IPO) of HBD Financial Services Limited offers an early investment opportunity in HBD Financial Services Limited. A stock market investor can buy HBD Financial Services Limited IPO shares by applying in IPO before HBD Financial Services Limited shares get listed at the stock exchanges. An investor could invest in HBD Financial Services Ltd IPO for short term listing gain or a long term.
How to apply for the HBD Financial Services Limited IPO through StoxBox?
To apply for the HBD Financial Services Limited IPO through StoxBox one can apply from the website and also from the app. Click here
When will the HBD Financial Services Limited IPO open?
HBD Financial Services Limited IPO is opening on 25th Jun 2025. Apply Now
What is the lot size of the Globe Civil Projects Limited IPO?
The Lot Size of Globe Civil Projects Limited IPO is 211 equity shares. Login to your account now.
When is the HBD Financial Services allotment date?
The allotment Date for HBD Financial Services Limited IPO is 30th Jun 2025. Login to your account now.
When is the HBD Financial Services Limited IPO listing date?
The listing Date for HBD Financial Services Limited IPO is 2nd July 2025. Login to your account now
What is the minimum investment required for the HBD Financial Services Limited IPO?
In the Retail segment the minimum investment required is Rs. 14,800. Login to your account now
What is the maximum investment allowed for the HBD Financial Services Limited IPO?
In the Retail segment the maximum investment requirement is Rs. 1,92,400. Login to your account now
What are the risks associated with investing in the HBD Financial Services Limited IPO?
- As at March 31, 2025, 26.99% of HDBFSL’s total gross loans were unsecured, down from 28.66% a year earlier. These loans are not backed by collateral, which limits recovery options in case of borrower default. As a result, any material deterioration in the performance of the unsecured portfolio could lead to elevated credit losses and adversely affect the company’s asset quality and profitability.
- Non-payment or default by HDBFSL’s customers could lead to a rise in non-performing assets, requiring higher provisioning and impacting profitability. Inadequate provisioning coverage or a sudden change in regulator-mandated provisioning norms may further strain the company’s financial position.
- HDBFSL, along with its Promoter and certain Directors, is involved in various legal and regulatory proceedings. These include actions and penalties imposed by relevant authorities. Any adverse outcome in these matters could materially impact the company’s reputation, business operations, cash flows, and overall financial condition.
When will the HBD Financial Services Limited IPO shares be credited to my Demat account?
The HBD Financial Services Limited . IPO be credited to the account on allotment date which is 30th Jun 2025. Login to your account now
Where can I find the HBD Financial Services Limited IPO prospectus?
The prospectus of HBD Financial Services Limited IPO prospectus can be find on the website of SEBI, NSE and BSE
