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regular-article-logo Friday, 22 November 2024

HDB Financial plans to mop up Rs 12500 crore

The proposed IPO comprises a fresh issue of shares aggregating up to Rs 2,500 crore and an offer for sale (OFS) aggregating up to Rs 10,000 crore by HDFC Bank

Our Special Correspondent Mumbai Published 01.11.24, 10:44 AM
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HDB Financial Services, a subsidiary of HDFC Bank, has filed draft papers with the Securities and Exchange Board of India (Sebi) for a 12,500-crore initial public offering (IPO).

The proposed IPO comprises a fresh issue of shares aggregating up to 2,500 crore and an offer for sale (OFS) aggregating up to 10,000 crore by HDFC Bank.

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Its listing comes in light of the Reserve Bank of India (RBI) norms which mandate that upper layer non-banking finance companies (NBFCs) should list by September 2025.

Earlier this month, the board of HDFC Bank approved the share sale. After the proposed IPO, HDB Financial Services will continue to be a subsidiary of the private sector lender.

HDB Financial Services offers a large portfolio of lending products through a wide omni-channel distribution network. Its products are offered through three business verticals: enterprise lending, asset finance and consumer finance.

The company is one of India’s largest and fastest growing customer franchises, according to Crisil, and has served 17.5 million customers as of September 30, 2024.

The non-bank lender largely caters to the underserved and underbanked customers in low- to middle-income households with minimal or no credit history.

HDB Financial Services will utilise the net proceeds from the fresh issue towards augmenting its core Tier–I Capital base.

Total gross loans stood at 98,620 crore as at September 30, 2024, reflecting CAGR (compounded annual growth rate) of 20.93 per cent between March 31, 2022 and September 30, 2024.

Enterprise lending accounted for 39.85 per cent of its total gross loans while the share of asset finance stood at 37.36 per cent.

Consumer finance, which accounts for 22.79 per cent of its loans, comprises both secured and unsecured loans for the purchase of consumer durables, digital and lifestyle products, two-wheelers and automobiles. It also includes unsecured personal loans.

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