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HDB Financial Services’ lists at 13% premium over IPO price

The issue consists of a fresh issuance aggregating up to Rs 2,500 crore and an offer for sale of up to Rs 10,000 crore by the parent company HDFC Bank.

The HDB Financial Services’ Rs 12,500-crore initial public offering (IPO), the largest public offering by a non-banking entity in the domestic capital market, got subscribed 16.69 times. (Photo: LinkedIn/@Altius Investech)

Non-banking financial company HDB Financial Services made its stock market debut on Wednesday with a 13 per cent premium on both the NSE and BSE. The stock climbed further and ended the trading session with 14 per cent gains on stock exchanges.

HDB Financial Services’ share price opened at Rs 835 apiece on both the exchanges, compared to the issue price of Rs 740 per share. On NSE, the stock rose 13.55 per cent to close at Rs 840.95 a share, while it gained 13.64 per cent to end at Rs 840.9 per share on BSE.

The price band of the issue, which closed on June 27, was fixed at Rs 700 to Rs 740 per share.

“The 13 per cent listing premium strikes a measured note, respectable without being euphoric, much like HDB Financial itself. The market appears to have carefully weighed its dual proposition, the stability of HDFC lineage against the challenges of a maturing NBFC sector,” said Tarun Singh, MD and founder, Highbrow Securities.

The HDB Financial Services IPO worth Rs 12,500-crore is the largest public offering by a non-banking entity in the domestic capital market. It was subscribed 16.69 times, with investors bidding for 217.67 crore shares as against 13.04 crore offered.

Retail investors showed a tepid response to the issue, with the portion being subscribed 1.41X. The qualified institutional buyers’ (QIB) portion was subscribed 55.47 times while non-institutional investors’ (NII) portion was subscribed 9.99 times. Employees and shareholders portions were subscribed 5.72 times and 4.26 times, respectively.

The issue consisted of a fresh issuance aggregating up to Rs 2,500 crore and an offer for sale of up to Rs 10,000 crore by the parent company HDFC Bank. Post the IPO, HDFC Bank’s stake in HDB Financial Services will reduce to 75 per cent from the current 94 per cent.

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Ahead of the IPO opening, HDB Financial Services raised Rs 3,368.99 crore from anchor investors which included Life Insurance Corporation of India, ICICI Prudential Mutual Fund (MF), Nippon Life India MF, BlackRock, Axis MF, Aditya Birla Sun Life MF, UTI MF, Schroder International Selection Fund, Goldman Sachs Funds, among others.

HDB Financial Services’ IPO is the country’s largest issue since Hyundai Motor India Ltd’s Rs 27,870-crore share offering last year.