23 September 2024
HDB Financial Services Ltd, a non-banking subsidiary of HDFC Bank, has announced plans for an initial public offering (IPO) that will include a fresh equity issue worth Rs 2,500 crore and an offer for sale by existing shareholders, as reported by Bloomberg. HDFC Bank, which holds a 94.64 percent stake in HDB Financial Services, is in the process of shortlisting bankers for the issue. Foreign banks such as Morgan Stanley, Bank of America, and Nomura, as well as domestic firms like ICICI Securities, Axis Capital, and IIFL, have been shortlisted for this IPO, as per reports from Moneycontrol in September.
HDFC Bank is aiming for a valuation of Rs 78,000-87,000 crore for HDB Finance, which translates to an estimated price-to-book value of 4.5 to 5 times. This IPO could lead to the bank offloading 10-15 percent of its stake, potentially raising Rs 7,800-8,700 crore and strengthening its capital adequacy. As of June 2024, HDFC Bank’s capital adequacy ratio stood at 19.3 percent.
The decision to list HDB Financial Services follows the Reserve Bank of India's mandate in October 2022, requiring non-banking financial companies (NBFCs) in the "upper layer" to list on the stock exchanges. The IPO approval also comes shortly after the successful listing of Bajaj Housing Finance, which saw its market cap cross Rs 1.4 lakh crore this week.
HDB Financial Services Ltd, a non-banking subsidiary of HDFC Bank, has announced plans for an initial public offering (IPO) that will include a fresh equity issue worth Rs 2,500 crore and an offer for sale by existing shareholders, as reported by Bloomberg. HDFC Bank, which holds a 94.64 percent stake in HDB Financial Services, is in the process of shortlisting bankers for the issue. Foreign banks such as Morgan Stanley, Bank of America, and Nomura, as well as domestic firms like ICICI Securities, Axis Capital, and IIFL, have been shortlisted for this IPO, as per reports from Moneycontrol in September.
HDFC Bank is aiming for a valuation of Rs 78,000-87,000 crore for HDB Finance, which translates to an estimated price-to-book value of 4.5 to 5 times. This IPO could lead to the bank offloading 10-15 percent of its stake, potentially raising Rs 7,800-8,700 crore and strengthening its capital adequacy. As of June 2024, HDFC Bank’s capital adequacy ratio stood at 19.3 percent.
The decision to list HDB Financial Services follows the Reserve Bank of India's mandate in October 2022, requiring non-banking financial companies (NBFCs) in the "upper layer" to list on the stock exchanges. The IPO approval also comes shortly after the successful listing of Bajaj Housing Finance, which saw its market cap cross Rs 1.4 lakh crore this week.
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