HDB Financial IPO Live Update: Apply or Skip?

The headlines scream that HDB Financial Services aims for a Rs. 12,500 crore IPO. Yes, as the market opened today, HDB IPO shares are available at a premium of Rs.75 in today's grey market, which will remain open until 27 June 2025.

However, the question remains, "Is it good for you to invest in this IPO or skip it?"

On that note, let's look at a few key highlights before discussing this newly launched IPO in detail.

• HDB Financials IPO price, as declared by the company, is Rs.700 to Rs.740 per equity share.
• HDB Financials IPO date for public issues has opened today and will remain open until 27th June 2025.
• The size of HDB's IPO is aimed at Rs.12,500 crore, of which Rs.10,000 crore is reserved for OFS and the rest Rs. 2,500 crore is kept for fresh shares.
• The lot size applied by the bidder will comprise 20 company shares.
• The IPO allotment date will likely be final; it will be listed by 30 June 2025, with the share allocation complete.
• UFG Intime India Private Limited has been appointed as the official registrar of the book build issue.
• BNP Paribas, JM Financial, BofA Securities India, Goldman Sachs India, HSBC Securities, IIFL Capital Services, Jefferies India, Morgan Stanley India, Motilal Oswal Investment Advisors, Nomura India, Nuvama Wealth Management, UBS Securities India have been appointed lead managers of the public issue.
• The most possible date for listing shares is 2 July 2025.

HDB Financial Services IPO Details

The table below covers the basic details of the HDB Financial Services IPO 2025:

How is the HDB Financial IPO Valued?

The valuation of the HDB Company is based on four basic parameters, which are:

• PE Ratio (Price-to-earnings ratio) = 27.07
• P/B (FY25) = 3.72
• Debt to Equity = 5.15
• Market Cap = Rs.58,889 cr.

See the table below comparing the valuations of HDB Company with BAJAJ Financials and Shriram Financials for the FY25:

Where Does HDB Make its Money?

The loan portfolio breakdown for the HDB for FY2025 is categorized into three parts:

1. Consumer finance at 22.79%
2. Asset Finance at 37.36%
3. Enterprise Lending at 39.85%

You can look at the pie chart below to get a clearer picture of the data:

How Much Profit Gained After Tax Dip?

The profit after the tax dipped is marked at 11.6% YoY in FY27. In this, unsecured loans stood at 29% of book higher risk and gross NPA rose from 1.9% to 2.3%, compared to Bajaj Finance's gross NPA was only 1.5%. HDB's rising stress is a concern.

To Conclude

In short, in our expert opinion, HDB Financial IPO has appealed to many investors due to its large size of Rs.12,500 crores, hyping the sudden market interest. However, you should take into account the concerns over rising bad loans and slow profit growth in the long term.

If you are looking for stable returns, it might be better to wait or skip, but if you're comfortable with potential risks for short-term gains, you could consider applying.