January 9, 2025
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Roadshows for HDB Financial’s IPO underway
International roadshows are underway for the multi-billion IPO of HDFC Bank’s non-banking arm, HDB Financial Services.
Senior officials of the bank and HDB Financial are meeting large investors in the UK, the US, Singapore and Hong Kong.
Large foreign funds, including sovereign funds and pension funds, have been contacted to understand their appetite to invest in a large issuance like HDB Financial, the sources said.
HDB Financial’s valuation is pegged between $10 billion and $12 billion, around Rs 85,000-1,00,000 crore.
“Final price discovery will depend on the kind of response that HDB Financial draws from interested investors,” said a banker who spoke on condition of anonymity as he is not authorised to speak to media. “It’s too soon to comment on the pricing of the issue.”
Unlisted shares of HDB Financial trade at Rs 1,225 apiece, representing a market capitalisation of Rs 97,154 crore.
Roadshows are in full swing, and HDFC Bank, according to sources, plans to roll out the IPO within two or three weeks of receiving final comments from the Securities and Exchange Board of India. “The aim is to wrap up the IPO of HDB Financial by the end of this fiscal,” said another banker who, too, didn’t wish to be identified.
HDFC Bank filed the draft red herring prospectus with Sebi on November 5.
According to the draft document, the IPO consists of a Rs 10,000 crore of offer for sale by the parent bank and fresh issuance of Rs 2,500 crore. It represents a little over 10 percent stake held by the bank in its NBFC arm. HDFC Bank holds a 94.36 percent in HDB Financial.
On December 16, it was reported that HDFC Bank may be in talks with Japan’s Mitsubishi UFJ Financial Group (MUFG) for a 20 percent stake sale in HDB Financial.
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