As HDB Financial Services gears up for its ₹12,500 crore IPO, Managing Director and CEO Ramesh Ganesan has addressed investor concerns over the steep 40% discount to the company’s grey market valuation. The IPO, priced between ₹700 and ₹740 per share, has surprised many, especially given that unlisted shares were recently trading around ₹1,200–₹1,250.
💬 Valuation Based on Investor Feedback
Ramesh clarified that the pricing was not arbitrary but the result of extensive consultations with global and domestic investors and investment bankers.
“We’ve been doing roadshows for quite some time now… the value is derived by talking to investors and bankers,” he said.
🏦 Independence from HDFC Bank
Addressing speculation about overlap with parent company HDFC Bank, Ramesh emphasized that HDB Financial is an independent lending engine, with its own customer base, risk management systems, and infrastructure.
“We don’t get any leads from our parent. We originate, underwrite, and service customers independently,” he added.
📉 Why the Discounted Valuation?
Several factors influenced the conservative pricing:
- Regulatory Overhang: A draft RBI circular may require banks to reduce stakes in NBFC arms to 20%, potentially impacting HDFC Bank’s 94.6% holding.
- Asset Quality Concerns: Gross NPAs rose to 2.26% in March 2025 from 1.9% a year earlier.
- Market Volatility: The company opted for a valuation that would be attractive to long-term investors, rather than chasing grey market highs.
📈 IPO Details
- Issue Size: ₹12,500 crore (₹2,500 crore fresh issue + ₹10,000 crore OFS by HDFC Bank)
- Bidding Window: June 25–27, 2025
- Listing Date: July 2, 2025 (expected)
- Post-IPO Stake: HDFC Bank’s holding to reduce to 75%
