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HDFC Bank non-banking subsidiary HDB Financial Services Ltd’s Rs 12,500-crore IPO opened for subscription on Wednesday. The price band of the IPO, which is one of the largest public offerings by a non-banking entity in the Indian capital market, was set at Rs 700-740 per share. This is also the country’s largest IPO since Hyundai Motor India Ltd’s Rs 27,870 crore share offering last year.
At the end of the first day of the subscription, the issue got subscribed 37 per cent, with bids for 4.86 crore shares being received as against 13.04 crore shares offered. The retail portion got subscribed 30 per cent, as investors in the category applied for 1.7 crore shares as against the total retail quota of 5.62 crore shares.
The qualified institutional buyers (QIB) portion got subscribed 1 per cent, with bids for 3.32 lakh shares being received as against 3.21 crore shares offered. The non-institutional investors portion was subscribed 76 per cent. The employees and shareholders portions saw strong subscriptions of 176 per cent and 70 per cent.
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.
Post the IPO, HDFC Bank’s stake in HDB Financial Services will be reduced to 75 per cent from the current 94 per cent. The issue will close on June 27.
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.
Geojit Investments Ltd in a note said at the upper price band of Rs 740 apiece, HDB Financial Services is available at a price-to-book (P/B) ratio of 3.4x (FY25-post issue basis), which appears to be fairly priced compared to its peers.
