17-Jan-2024
2 mins read
HDFC Bank, one of the leading lenders in the Indian banking sector, is gearing up for a significant move in the financial market. The bank’s Chief Financial Officer, Srinivasan Vaidyanathan, recently announced that the initial public offering (IPO) process for its non-banking arm, HDB Financial Services, will start in the next few months. This strategic decision marks a pivotal step in the bank’s expansion and diversification plans.
IPO Timeline and Preparations
The scheduled timeline for the IPO listing is set for September 2025. According to Vaidyanathan, the bank is initiating activities around the IPO to ensure maximum flexibility and to capitalise on the right market conditions. The preparation phase will include filing necessary documents with the Securities and Exchange Board of India (SEBI) and securing approval for the public offering.
As of December 31, 2023, HDFC Bank holds a 94.7 per cent stake in HDB Financial Services. The subsidiary has shown promising financial growth, reporting a profit of Rs 640 crore in the October-December quarter of FY 2023-24, an increase from Rs 500 crore in the previous year. The total loan book of HDB Financial Services stands at an impressive Rs 84,000 crore, up from Rs 65,100 crore in the corresponding quarter of the last year.
Impact of HDFC and HDFC Bank Merger
The IPO plans for HDB Financial Services and HDFC Securities have been a topic of discussion since the merger process of HDFC and HDFC Bank. Sashidhar Jagdishan, CEO of HDFC Bank, stated in July 2022 that the IPO plans for both entities would be considered post-merger based on regulatory guidance and the completion of the merger process. The IPO of HDB Financial Services is a key element in this larger strategic framework.
The upcoming IPO of HDB Financial Services is a significant event for HDFC Bank and its stakeholders. It represents the growth and success of its non-banking arm and the bank’s commitment to diversifying its portfolio and strengthening its position in the financial sector. As the process unfolds in the coming months, the market eagerly awaits what could be one of the most notable public offerings in recent times.