Shares of HDB Financial Services, which made its stock market debut on Wednesday, extended its gains for the second straight trading session and scaled new highs on Thursday. The stock rose more than 20 per cent in just two trading sessions, surpassing the likes of Godrej Prosperities, YES Bank, Bharat Forge, IRCTC, Coforge and more in terms of market capitalization (m-cap).

Shares of HDB Financial Services rose more than 6 per cent during the trading session on Thursday to 891.65 on BSE, with its m-cap marginally shy of Rs 74,000 crore. The stock had settled at Rs 840.90 on Wednesday, rising nearly 13.65 per cent over its IPO price of Rs 740 apiece. The stock is up 20.49 per cent from its IPO price so far.

HDB Financial has raised a total of Rs 12,500 crore via IPO, which was open between June 25-27. The issue was overall subscribed 16.7 times, attracting bids for Rs 1.62 lakh crore. HDFC Bank Ltd raised Rs 9,815 crore from the sale of 13.5 crore shares through the OFS in the newly listed subsidiary. HDFC Bank's stake in HDB Financial has reduced to 74.2 per cent from the 94.5 per cent earlier.

Even before its listing Emkay Global Financial Services initiated coverage on HDB Financial Services with buy and a target price of Rs 900. "Our positive view is due to it being a highly diversified, extremely granular, and large-scale lending franchise with over 19 million customers. It has seen multiple credit cycles, covid, and built from scratch with a bottom-up approach" it said.

Emkay added that HDB Financial's strategy of focusing on direct sourcing, remote areas, and low-to-mid-income groups with limited to no credit history has been driven by the skilled top management, reflecting strong conviction and consistency. With a favorable interest rate cycle amid frontloaded repo rate cuts driving NIM expansion, credit cost moderation, and the growth outlook improving, HDBFS is well positioned to improve profits/growth," it said.

Incorporated in 2007, Ahmedabad-headquartered HDB Financial Services is a retail-focused, non-banking financial company. Its lending products are offered through the three business verticals- enterprise lending, asset finance and consumer finance. It also offers business process outsourcing (BPO) services to its parent HDFC Bank.

However, Dharan Shah, Founder at Tradonomy AI by Jamnadas Virji Group is not much impressed by major chunk of fundraising going the parent entity. "However, the overall outlook remains subdued due to a major portion being OFS which we considere as a negative sign for the company," he said.

With 1,680 branches, it manages a Rs 1.07 lakh crore loan book, comprising 43 per cent vehicle finance, 24 per cent mortgage, 24 per cent personal, plus gold and enterprise loans. It is one-fourth of Bajaj Finance 4.16 lakh crore book. Interest income rose 25 per cent but NIMs slipped 40 bps to 7.85 per cent due to higher borrowing costs which may reserve after RBI rate cutes, Shah adds.

Other experts continue to remain positive on HDB Financial Services. Mahesh Ojha, AVP of Research at Hensex Securities said that that HDB Financial Services is a portfolio stock and one should accumulate the counter on correction if the market sentiments turns volatile.

Prashanth Tapse, Senior VP of Research at Mehta Equities believes that HDB Financials' strategic positioning to benefit from liquidity push from RBI, especially with high focus on SME NBFC growth.

"Given the healthy listing prevailing bullish sentiment in the market, we recommend holding the stock for the long term, as HDB Financial Services is strategically positioned to benefit from India’s structural credit growth. We see HDB Financial offers a value-driven opportunity with defensive and growth characteristics, best suitable for investors with a 3-5 year investment horizon."