HDB Financial vs Bajaj Finance: How do the NBFCs stack up against each other?

The net IPO proceeds will be used to augment capital base for future capital requirements including onward lending under any of the company's business verticals i.e. enterprise lending, asset finance and consumer finance.

HDB Financial Services IPO price band has been set between ₹700 to ₹740 per share. The minimum lot size for an application is 20 shares. HDB Financial Services shares will be listed on the NSE and the BSE on Wednesday, July 2, 2025.

HDB’s IPO positions itself among listed NBFCs like Bajaj Finance, Muthoot Finance, and Shriram Finance, companies that have already established significant market presence in the NBFC industry.

NBFC sector: Competitive landscape

Non-Banking Financial Companies (NBFCs) are increasingly emerging as the backbone of India’s credit ecosystem—particularly for underbanked and retail borrowers. NBFCs have grown at a CAGR of 12% between FY19 and FY24, outpacing India’s GDP growth. Their collective AUM has expanded from less than ₹2 lakh crore in 2000 to ₹43 lakh crore by FY24. What sets NBFCs apart is their 48% exposure to the retail lending segment, which is significantly higher compared to 34% of total bank credit.

With deeper penetration into rural and semi-urban markets, NBFCs are enabling credit access for first-time borrowers, gig workers, and informal sector participants. As FY25 unfolds, this growth trajectory is set to accelerate, powered by rising consumption and digital transformation in lending. India’s NBFC sector is expected to grow at a CAGR of 15–17% between FY24–FY27, supported by:

• Growing credit demand from semi-urban and rural markets
• Rise in unsecured and digital loans
• Regulatory measures improving risk frameworks

Leading NBFCs in India include Bajaj Finance, Muthoot Finance, Manappuram Finance, Shriram Finance, Cholamandalam Investment, L&T Finance and others. HDB Financial is set to join the listed space soon. Here’s a detailed comparison of HDB Financial with Bajaj Finance, a prominent company in the NBFC industry:

FY25 financial overview

Bajaj Finance outperforms HDB Financial across key metrics, including revenue, profitability, and market valuation. While Bajaj Finance shows stronger returns and more conservative leverage, HDB Financial is positioned for growth with a higher debt-to-equity ratio. Bajaj Finance’s larger market cap reflects its established leadership, while HDB’s entry into the market offers growth potential.

Asset quality

Bajaj Finance demonstrates superior asset quality with lower NPA ratios compared to HDB Financial. Table below outlines the asset quality comparison using NPA ratios and provision coverage.

AUM and cost of funds

Bajaj Finance leads in AUM size, showing stronger growth compared to HDB Financial. Cost of funds slightly higher for HDB Financials.

The table below compares the size and growth of the loan books and AUM of both companies.

*Consolidated numbers

Branch network and customer base

Bajaj Finance has a broader coverage, a significantly larger customer base and physical presence, with more than three times the number of locations from HDB Financials.

Before you leave

Bajaj Finance continues to lead the NBFC space in scale, profitability, and digital adoption, while HDB Financial, supported by HDFC Bank, is steadily expanding in underserved markets with a solid risk framework. For investors, Bajaj Finance offers proven stability, whereas HDB’s IPO presents medium-term growth potential, especially if it sustains revenue momentum and improves margins.