HDB Financial Services, a subsidiary of HDFC Bank, got the green light from its board for an initial public offering (IPO) on Friday. The IPO will include a fresh issue of shares worth ₹2,500 crore and an offer for sale (OFS) by existing shareholders, according to an announcement from HDFC Bank.
HDFC Bank stated that the OFS will allow current shareholders to sell their shares, subject to approval from shareholders, market conditions, and necessary regulatory approvals.
The company’s board also approved updates to its articles of association and employee stock option schemes to meet regulatory requirements. Currently, HDFC Bank holds a 94.6% stake in HDB Financial Services.
HDB Financial IPO Details
This IPO is the first from the HDFC Group in six years. On July 20, HDFC Bank announced that its board gave in-principle approval to start the listing process for HDB Financial Services. The decision follows a directive from the Reserve Bank of India (RBI) that non-banking financial companies (NBFCs) in the “upper layer” must be publicly listed. This directive came out in October 2022.
Recently, HDFC Bank turned down a proposal from Japanese lender Mitsubishi UFJ Financial Group (MUFG) to buy a 20% stake in HDB Financial Services, as reported on September 4 by Mint.
In the first quarter of FY25, HDFC Bank saw a 2% drop in net profit, from ₹16,511.9 crore in the same quarter last year to ₹16,175 crore. The bank’s net interest income (NII), which measures the difference between interest earned and paid, grew by 2.6%, from ₹29,078 crore in Q4 FY24 to ₹29,837 crore in the latest quarter.
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