HDB Financial Services IPO Analysis: What RHP reveals about its financials and growth strategy

HDB Financial Services IPO: The eagerly awaited ₹12,500 initial public offering of HDB Financial Services, a subsidiary of HDFC Bank, opened on June 25. The issue will end on June 27. In the article, we will be discussing non-banking financial company's (NBFC) financials and growth strategies.

The initial share sale comprises a fresh issuance of 3.38 crore shares worth ₹2,500 crore and an offer for sale component of ₹10,000 crore by promoter HDFC Bank. The generated funds will be used to boost its Tier-I capital base.

HDB Financial Services IPO: A look at its financials

HDB Financial Services reported an 11.57% decline in its profit after tax (PAT) to ₹2,175.92 crore in the financial year 2024-25, according to the red herring prospectus (RHP). The net profit stood at ₹2,460.84 crore in the year-ago period.

Revenue from operations increased 15% to ₹16,300.28 crore in FY25, compared to ₹14,171.12 crore in FY24.

The net profit and revenue stood at ₹1,959.35 crore and ₹12,402.88 crore, respectively, in FY23.

The interest income rose 24% year-on-year (YoY) to ₹13,835.79 crore in the fiscal year 2025, while expenses climbed 23% to ₹13,372.48 crore.

HDB Financial Services IPO: A look at its growth strategies

• HDB Financial has created a highly diversified portfolio of lending products to serve various customer segments. The company in its RHP said it will keep adding new products to its portfolio while improving existing products to improve value proposition to customers.
• As of March 2025, the NBFC has more than 1,771 physical branches in over 1,170 towns located in 31 states and union territories. The firm intends to grow its distribution network by opening new branches.
• The company will continue to invest in data analytics, technology and artificial intelligence (AI) to improve customer experience, increase productivity and decrease cost.
• HDB Financial Services intends to diversify its funding sources by enlarging its lender base to optimise both leverage level and average cost of borrowings.
• While growing its customer franchise, the company intends to focus on improving its robust risk-management framework so that it is able to retain high credit quality.
• The company said it will continue to attract, upskill and retain talented employees.

HDB Financial Services shares will debut on the BSE and the NSE on July 2.