HDB Financial Shares trade beneath Rs 780 IPO price amid Disappointing Q1 results

The HDB Financial Services share price has been drawing a lot of attention lately as it slipped below the much-tracked hdb financial services ipo price and is trading at Rs 781.55 as of July 24, 2025. Investors who were hopeful after a strong debut now see the HDFS share price securing fresh post-listing lows, raising questions about the company's immediate prospects. Ever since the hdb financial services ipo date of June 27, 2025, the stock has had a bumpy ride, rarely managing to hold above its issue price, leaving many investors concerned about where it's headed next. Meanwhile, the current Q1 results were also not in favour of the HDB financial services share price.

Let's understand how the HDB Financial Services IPO has been and what their Q1 results were.

HDB Financial Services IPO Review

When the hdb financial services ipo launched, it was a big event on Dalal Street. The company raised an impressive Rs 12,500 crore through a combination of fresh issue and offer for sale, with the hdb financial services ipo price pegged at Rs 740 per share.

Various investors saw a strong demand, and the IPO oversubscribed more than sixteen times. When it listed on July 2, 2025, the HDB Financial Services share price opened well above the issue price. After the IPO date of HDB financial services, the prices went up to Rs 845, then wandered below the IPO price and are trading below it.

Meanwhile, the excitement which made investors oversubscribe the HDB IPO is fading quickly as asset quality and NPA worries grew among the investors.

Since listing, the HDFS share price has mostly traded under its hdb financial services ipo price, making some early investors nervous about the stock's direction. Let's understand the reason behind the downtrend of HDFS share price and what the HDB Financial Services Q1 results were

How Was HDB Financial Services Q1 Results Were?

Overview of HDB Financial Services Q1 results

The much-awaited HDB Financial Services Q1 results delivered some mixed signals to the market. While net interest income jumped 18% year‑on‑year to Rs 2,092 crore, profits did not follow suit, thanks to sharply higher provisioning costs

Meanwhile, asset quality metrics showed fresh challenges, with gross Stage 3 assets climbing to 2.56% compared to 1.93% a year earlier, and credit costs rising by 63% to Rs 670 crore. These figures made the Q1 results a disappointment to many. The decline in profit despite solid revenue growth triggered deeper concerns about risk management—directly impacting the HDFS share price as investors reassessed the company’s growth potential.

Management noted that higher provisions were a proactive buffer against anticipated stress in commercial vehicle loans, but offered only conservative guidance for margin expansion in the coming quarters. Meanwhile, peers in the non‑banking finance sector reported more modest credit cost increases, intensifying the scrutiny on HDB’s portfolio mix. Following the release, the stock underperformed the broader NBFC index, with trading volumes spiking as long‑only investors trimmed exposure. Analysts now await more color on recovery timelines for stressed assets and the effectiveness of enhanced collection practices before revising their earnings forecast

Why HDB Financial Services is Trading Below IPO Price? 

So, why is the HDB Financial Services share price still trading below the HDB Financial Services IPO price? A big factor is the underwhelming HDB Financial Services Q1 results, which showed that even with rising income, actual HDB Financial Services profit was feeling the pinch from increased bad loans and provisions.

Asset quality seemed to wobble just as the company needed to impress, with gross NPAs rising to 2.56%. Add in a rich IPO valuation at 4x FY25 book value, and the justification for the high HDB Financial Services IPO price no longer looks so convincing. Regulatory clouds and the expected post-lock-in supply from early investors have only made the atmosphere more cautious, keeping the HDFS share price under the waterline set by its IPO. 

Let's understand what the recovery path can be for the HDB financial services in the future.

Recovery Path For HDB Financial Services

Leadership at HDB Financial is confident that HDB Financial Services profit is on track to recover in the coming quarters. The company should focus on dialing down risky exposures in commercial vehicles and personal loans, while better collection processes could bring credit costs back to healthier levels—hopefully between 1.8% and 2.0%. If interest rates start to fall, there's potential for margin expansion too, which should help boost the HDFS share price. Analysts also point to the freshly raised capital from the HDFC Financial Services IPO as a strong buffer for growth, while cross-selling within the HDFC Bank ecosystem could drive more fee income. If these strategies work, the HDB Financial Services share price could well recover and reward patient investors.

Conclusion

The drop in the HDB Financial Services share price below the hdb financial services ipo price is mostly a reflection of investor disappointment after the first set of HDB Financial Services Q1 results as a listed company. Asset quality hiccups and higher provisioning have weighed on the HDFS share price, but the firm's strong lineage and diversified lending book offer hope for a turnaround. For long-term investors, current levels may even present an opportunity—provided management can bring credit costs under control and make the best out of the capital from the hdb financial services ipo. If HDB Financial Services profit shows signs of sustainable improvement, the HDB Financial Services share price could move back above that critical Rs740 hdb financial services ipo price mark, offering rewarding returns for those who stay the course.