HDB Financial Services, the non-banking finance arm of HDFC Bank, has submitted its Draft Red Herring Prospectus (DRHP) to Sebi, proposing an initial public offering (IPO) of up to Rs 12,500 crore (USD 1.49 billion). The announcement was made by HDFC Bank on 31 October, following the DRHP submission the previous day. The IPO will proceed following necessary regulatory approvals and market conditions, the bank noted.
The public offering includes a fresh issue of shares totalling up to Rs 2,500 crore, with an offer for sale (OFS) of up to Rs 1,000 crore from existing shareholders. HDFC Bank, which holds a 94.6 per cent stake in HDB Financial, plans to divest up to Rs 10,000 crore worth of shares through the OFS route.
The capital raised is set to support HDB Financial’s requirements for onward lending, reflecting the company’s commitment to expanding its lending activities.
The move marks HDFC Group’s first public float in six years and aligns with regulatory mandates requiring large NBFCs, classified in the "upper layer" due to their size and risk profile, to be listed by September 2025. Despite the IPO, HDB Financial will continue to be a subsidiary of HDFC Bank, meeting the necessary regulatory compliance standards.
Advising on the IPO are four investment banks namely Jefferies, JM Financial, Morgan Stanley and Nomura.
The listing comes as fundraising through IPOs in India has hit unprecedented levels in 2024. With total IPO proceeds exceeding Rs 1.22 lakh crore, the year has already surpassed the previous record of Rs 1.18 lakh crore set in 2021, with around 70 per cent of this amount raised since August.