HDB Financial Services' Rs 12,500 crore IPO has attracted strong interest from top brokerages. Backed by HDFC Bank and focused on the underbanked and retail lending space, the company is being closely compared with peers like Bajaj Finance, Shriram Finance, and Cholamandalam. Here's what major brokerages are recommending.

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"The company is backed by strong parentage, brand, governance, risk management and a high credit rating," states SBI Securities, recommending subscription while expecting modest 5-10% listing gains. "It is one of the largest NBFCs catering to the 2nd largest customer franchise."

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Despite grey market signals of a higher valuation, the pricing appears aligned with peers like Bajaj Finance and Shriram Finance on a price-to-book basis.

While structural tailwinds in NBFC lending support valuation, near-term pressures on asset quality and margins are risks. Investors with a medium to long-term view may find the issue attractive, provided growth and operating efficiency improve post-listing.

5/11

Backed by HDFC Bank’s 94.3% stake, HDB Financial Services acts as a strong proxy for India’s rising credit demand in underbanked and MSME segments.

Operating independently with a robust digital setup, the IPO is priced at Rs 740/share (~3.7x FY25 P/B, ~14.7% RoE). While valuations are above peers like Chola and Shriram, they lag Bajaj Finance’s premium RoE.
Despite valuation concerns, HDB’s stable financials, rural reach, and niche position make it suitable for medium- to long-term investors.

6/11

HDB Financial Services offers investors a chance to back one of India’s leading and fastest-growing diversified NBFCs.

With a balanced loan portfolio across Enterprise, Asset, and Consumer Finance, HDB has shown consistent growth, strong underwriting, and resilient asset quality.
Backed by HDFC Bank’s brand and digital-first approach, the IPO is recommended for long-term investors.

7/11

Compared to Bajaj Finance and peers in vehicle, MSME, and consumer lending, HDB’s asset quality stands out, thanks to strong ownership and management pedigree.

Valuation is in line with peer averages, offering comfort. Hence, a 'Subscribe' rating is given, with a long-term positive outlook.

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HDB, backed by HDFC Bank, is the seventh-largest NBFC in India, with rapid growth in the retail and MSME segments.
As of March 31, 2025, the loan book stood at Rs 1,06,880 crore, growing at a 23.5% 2-year CAGR. NII rose 17.3% CAGR to Rs 7,446 crore. Post-issue P/BV is 3.88x and PER 28.2x, aligning with industry averages.

While FY25 saw slippages in asset quality and margin pressure, falling inflation, rate cut hopes, and normal monsoons could ease concerns. Chola Securities recommends subscribing for listing gains.