HDB Financial Services Limited’s initial public offering closed its first day with improved subscription levels, reaching 0.37 times the total offer today. The three-day IPO, which runs from June 25-27, 2025, saw increased investor interest in the final hours of trading for the 13.04 crore share offering.
The employee category led the charge with 1.76 times oversubscription, up from 1.35 times during mid-day trading. Non-Institutional Investors showed significant improvement, ending at 0.76 times subscription compared to 0.50 times earlier. The shareholders category also gained momentum, closing at 0.70 times subscription.
However, Qualified Institutional Buyers remained largely absent with minimal 0.01 times subscription, while Retail Individual Investors managed only 0.30 times their allocated portion. Market observers note that QIBs typically enter IPO subscriptions on the final day, making their participation crucial for overall success.
Among Non-Institutional Investors, those bidding above ₹10 lakh showed stronger appetite at 0.79 times subscription, while the ₹2-10 lakh segment achieved 0.70 times subscription.
HDB Financial Services, a subsidiary of HDFC Bank, is India’s second-largest non-banking financial company. The company primarily serves underserved customers in low to middle-income households, with 80 per cent of its branches located outside India’s 20 largest cities and over 70 per cent in Tier 4+ towns.
Analysts presented mixed views on the offering. Rajan Shinde of Mehta Equities recommended a “Subscribe” rating, citing the company’s strong parentage, diversified loan portfolio, and positioning to benefit from India’s financial inclusion drive. He noted the company’s 14.3 per cent revenue growth in FY2024 and extensive distribution network of 1,771 branches serving over 19 million customers.
However, Mirae Asset Capital Markets expressed caution, stating the issue appears “fully priced” at the upper band of ₹740 per share, which values the company at a price-to-book ratio of 3.5 times. They highlighted concerns over the company’s higher cost-to-income ratio exceeding 40 per cent and reduced provision coverage ratio of 56 per cent in FY2025 compared to 67 per cent in FY2024.
The company’s assets under management grew at 24 per cent CAGR over FY2023-FY2025, while maintaining gross non-performing assets at 2.26 per cent and generating return on equity of 14.7 per cent in FY2025.