HDB Financial Services Ltd, a non-banking subsidiary of HDFC Bank, has approved plans for an initial public offering (IPO) that will include a fresh equity issue worth Rs 2,500 crore and an offer for sale by existing shareholders. The IPO, which has been anticipated for months, and is likely to hit the market by December or by the end of the financial year.

• HDFC bank which holds a 94.64 percent stake in HDB Financial Services, has been in the process of shortlisting bankers for the issue.
• Foreign banks such as Morgan Stanley, Bank of America, and Nomura have been shortlisted, alongside domestic firms like ICICI Securities, Axis Capital, and IIFL.
• HDFC Bank is seeking a valuation of Rs 78,000-87,000 crore for HDB Finance, translating to an estimated price-to-book value of 4.5 to 5 times.
• This IPO could see the bank offloading 10-15 percent of its stake, potentially raising Rs 7,800-8,700 crore, bolstering its capital adequacy. As of June 2024, HDFC Bank’s capital adequacy ratio stood at 19.3 percent.