In a move that’s got the financial sector buzzing, HDB Financial Services, a subsidiary of India’s largest private bank HDFC Bank, is all set to go public. The company plans to raise a whopping ₹12,500 crore through its initial public offering (IPO), making it one of the biggest listings in recent times.
The announcement came on Saturday, October 19, 2024, when HDFC Bank’s board revealed their plans in a filing to the stock exchange. It’s not just about new shares though – HDFC Bank itself is looking to offload some of its stake. The parent company, which currently owns 94.6% of HDB Financial Services, will sell ₹10,000 crore worth of shares through an offer-for-sale (OFS).
Now, you might be wondering why they’re doing this. Well, it’s not just about cashing in. The Reserve Bank of India (RBI) has mandated that ‘upper layer’ non-banking financial companies (NBFCs) need to go public and get listed on stock exchanges. So, in a way, HDB Financial Services is just following the rules.
But what exactly does HDB Financial Services do? Founded back in 2007, it’s an NBFC that offers a mix of lending and business process outsourcing (BPO) services. They provide both secured and unsecured loans, and their BPO services cover everything from back-office tasks to front-office operations like contact centers and collections.
The company has a pretty impressive footprint too, with over 1,747 branches spread across 27 states and 4 union territories in India. And if you’re into credit ratings, you’ll be pleased to know they’ve got top-notch ratings from CARE and CRISIL.
As for the nitty-gritty details of the IPO, we’ll have to wait a bit longer. HDFC Bank has said that the price and other specifics will be hammered out in due course. But one thing’s for sure – even after the IPO, HDB Financial Services will remain a subsidiary of HDFC Bank.Oh, and if you’re curious about how HDFC Bank’s stock is doing, it closed at ₹1,681.15 on the Bombay Stock Exchange last Friday, October 18, 2024. That’s a modest gain of 0.47% or 7.80 points.
So, there you have it – a major player in India’s financial services sector is about to make its stock market debut. It’ll be interesting to see how investors respond when the IPO finally hits the market.
