HDB Financial Services IPO grey market premium surges ahead of issue opening next week; check key details before subscribing

HDB Financial Services IPO GMP surges ahead of issue opening next week.

HDB Financial Services IPO GMP has surged ahead of the issue opening for public subscription in the primary market next week. The maiden public issue of the subsidiary of HDFC Bank will open for subscription on June 25 and conclude on June 27, while the bidding for the anchor investor will open for a day on June 24.

One of the key indicators of market sentiment surrounding an IPO is the Grey Market Premium (GMP). According to websites tracking the grey market activities, the shares of HDB Financial Services are commanding a GMP of around 11 percent in the unofficial market. Investorgain quoted a GMP of Rs 83 for the shares of the company, commanding a GMP of about of 11.22 percent.

It's a premium amount paid at which initial public offering (IPO) shares are traded before it is listed on the stock exchanges.

The company fixed a price band of Rs 700-740 per share for its Rs 12,500 crore Initial Public Offering (IPO). At the upper end of the price band, the company is valued at nearly Rs 61,400 crore.

The IPO is a combination of a fresh issue of equity shares worth Rs 2,500 crore and an Offer For Sale (OFS) of Rs 10,000 crore by promoter HDFC Bank. At present, HDFC Bank holds a 94.36 per cent stake in HDB Financial Services, a non-banking financial company (NBFC) arm of the bank.

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The company proposes to utilise the proceeds from the fresh issue to strengthen its Tier-I capital base. This will support future capital needs, including additional lending, to support business growth.

The decision to list HDB Financial Services follows the Reserve Bank of India's mandate in October 2022, requiring NBFCs in the upper layer to list on the stock exchanges within three years.

Shares of the company are expected to list on the BSE and National Stock Exchange (NSE) on July 2, while the allotment of shares is expected on June 30.

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