HDB Financial Services Ltd, the non-banking financial arm of HDFC Bank, is poised to make headlines with a ₹12,500 crore initial public offering (IPO) scheduled for mid-July 2024, according to sources close to the matter. If executed as planned, this IPO will become the largest public issue of the year, surpassing the ₹8,750 crore offer by Hexaware Technologies in February, signaling a robust revival of investor confidence in India’s primary market.

Currently, HDB is preparing its Updated Draft Red Herring Prospectus (UDRHP), a refined version of the earlier DRHP that incorporates regulatory feedback from SEBI and the stock exchanges. This updated filing is expected to be submitted by the end of June, paving the way for the formal Red Herring Prospectus (RHP) and the subsequent public listing.

Founded in 2007, HDB Financial Services operates through three core verticals: enterprise lending, asset finance, and consumer finance. The company boasts a strong foothold in both secured and unsecured loans, serving underbanked and emerging customer segments across India. With a gross loan book of ₹98,620 crore as of September 30, 2024 — growing at a CAGR of 20.93% since FY22 — and an FY24 profit of ₹2,460 crore (55.9% CAGR over two years), the financials tell a compelling story for investors.

The IPO is driven by the RBI’s 2022 directive, mandating that all large NBFCs (classified as "upper layer") must list by September 2025 to ensure transparency and market accountability. HDB’s granular lending strategy, with the top 20 customers contributing less than 0.36% to the total loan book, reflects prudent risk management. Their average ticket size of approximately ₹1.45 lakh further underscores a focus on mass retail.

With market buzz building and regulatory green lights in place, HDB Financial’s IPO could not only redefine capital market momentum in 2024 but also set a new benchmark for large-scale NBFC listings.