HDFC Bank Shares Rise as HDB Financial Services’ ₹12,500 Crore IPO Opens for Subscription

HDFC Bank’s share price edged higher on June 25, 2025, climbing 0.4% to ₹1,968.80 on the National Stock Exchange (NSE) in early trade, as its subsidiary HDB Financial Services launched a blockbuster initial public offering (IPO) valued at ₹12,500 crore. The IPO, which will remain open until June 27, comprises a fresh issue of ₹2,500 crore and an offer for sale (OFS) of ₹10,000 crore by HDFC Bank, the promoter and majority shareholder. As of 12:48 PM, the bank’s share price is trading at ₹1,977.00, gaining 0.82%.

HDFC Bank currently holds a 94.36% stake in HDB Financial Services, a non-banking financial company (NBFC) with a diversified lending portfolio and a pan-India presence. The IPO price band is set between ₹700 and ₹740 per share, with an application size of 20 shares. At the upper end of the price band, HDB Financial is valued at ₹61,400 crore.

Strong Anchor Book and Institutional Interest

Ahead of the IPO, HDB Financial Services mobilised ₹3,369 crore from a robust line-up of anchor investors, including leading domestic and global names such as ICICI Prudential Mutual Fund, SBI Mutual Fund, Nippon India Mutual Fund, Life Insurance Corporation of India, BlackRock, Allianz Global Investors, Morgan Stanley, Royal Bank of Canada, Prudential plc, Copthall Mauritius Investment, ICICI Prudential Life Insurance, APG Asset Management, Norway’s Government Pension Fund Global, Goldman Sachs, Baillie Gifford, Schroder, Fidelity Investments, Societe Generale, Tata Investment Corporation, and Abu Dhabi Investment Authority. This strong anchor book underscores institutional confidence in HDB Financial’s business model and growth prospects, further buoying sentiment around HDFC Bank shares.

Fundamental Strength and Market Positioning

HDB Financial Services reported a net profit of ₹2,176 crore for the financial year ending March 2025, up sharply from ₹1,359 crore a year earlier. The company maintains healthy asset quality, with gross non-performing assets (GNPA) at 2.49% and net NPA at 1.38%. Its business spans secured and unsecured personal loans, gold loans, and lending to small and medium enterprises (SMEs), supported by over 1,700 branches across 1,200 cities and a customer base exceeding 1.9 crore.

The IPO proceeds from the fresh issue will be used to strengthen HDB Financial’s Tier-I capital base, supporting future business growth and lending activities. The OFS component will allow HDFC Bank to pare down its stake, aligning with regulatory norms and unlocking value for shareholders.

Brokerage Sentiment and Valuation

Brokerage houses have largely endorsed the IPO, citing HDB Financial’s strong parentage, established brand, robust governance, and sound risk management practices. SBI Securities, Anand Rathi, and Centrum have issued ‘subscribe’ recommendations, highlighting the company’s well-diversified product portfolio, granular retail lending model, and access to low-cost funding backed by a AAA-rated credit profile.

At the upper end of the price band, the IPO values HDB Financial at a price-to-book (P/B) ratio of 3.7x for FY25, which is considered reasonable compared to larger peers such as Bajaj Finance and Cholamandalam Investment and Finance. Deven Choksey Research notes that the IPO is attractively priced, with a trailing twelve-month P/B of 3.4x versus the peer average of 4.4x.

Grey Market Premium

The grey market premium (GMP) for the HDB Financial IPO stands at approximately ₹74 per share, suggesting a potential listing gain of around 10%. This positive sentiment has translated into early gains for HDFC Bank shares, as investors anticipate a successful listing and value unlocking for the parent company.

Note: The Grey Market Premium (GMP) is not an official price and is based on Market Speculation.

Source: Upstox, June 25 2025

Disclaimer: The GMP (Grey Market Premium) price is an unauthenticated market related news and has no discernible basis. The same quoted above is as per news appeared in the media report and is for information purposes only. The investor shall do their own study/research before using the same for taking any decision to invest. We neither engage in, trade, or deal in the grey market nor we recommend or endorse trading in the grey market.

Conclusion

The opening of HDB Financial Services’ ₹12,500 crore IPO has provided a fresh impetus to HDFC Bank’s stock, reflecting investor optimism around the subsidiary’s growth prospects and the parent bank’s value creation. With strong institutional backing, robust fundamentals, and reasonable valuations, the IPO is poised to be one of the largest and most closely watched offerings of the year. The market will be keenly tracking the subscription trends and eventual listing performance, which could further influence the trajectory of HDFC Bank shares in the near term.

Disclaimer: This news is solely for educational purposes. The securities/investments quoted here are not recommendatory.

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