HDB Financial Services picks Jefferies, JM Financial, Morgan Stanley & Nomura and kicks-off mega IPO

On September 4, 2024, Moneycontrol reported that HDB Financial Services was in the process of shortlisting bankers for the issue.

Banking behemoth HDFC Bank's subsidiary HDB Financial Services has engaged four investment banks as advisors for its proposed big-bang initial public offering (IPO), namely Jefferies, JM Financial, Morgan Stanley & Nomura , four persons in the know told Moneycontrol on the condition of anonymity.

"These four investment banks have been formally onboarded for now and the deal was kicked off yesterday. More i-banks may be added at a later stage, if required, " one of the persons above said.

Two other persons confirmed the above.

"Cyril Amarchand Mangaldas has been picked as the company counsel by HDB Financial Services," one of them added.

In a kick-off meeting, the issuer firm discusses key plans and the roadmap for the IPO along with the roles and responsibilities for the advisors who are brought together.

"These are early days, and the size and valuation haven't been finalized as yet but depending on the extent of dilution by the parent, the issue quantum may be in excess of a billion dollars," a fourth person told Moneycontrol.

Email queries to HDFC Bank, HDB Financial Services, JM Financial, Morgan Stanley and Cyril Amarchand Mangaldas remained unanswered at the time of publishing this article. This article will be updated once we hear from them. When contacted, Nomura and Jefferies declined to comment.

On September 4, 2024, Moneycontrol reported that HDB Financial Services was in the process of shortlisting bankers for the issue. The report added that the firm was targeting a listing by next March at a valuation in excess of $9bn.

The listing is a mandatory requirement with HDB Financial Services being an "Upper Layer" NBFC pursuant to the circular issued by the RBI in October 2022.

As per the RBI, all "Upper Layer" NBFC's are required to list within three years of being notified, i.e., September 2025. Bajaj Housing Finance falls in the same category and will make its public market debut soon.

Also Read: Bajaj Housing Finance IPO to open between September 9-11; to raise Rs 6,560 crore

On July 20, 2024, the board of directors of HDFC Bank provided an in-principle approval to initiate the process of listing of HDB Financial Services and formed a committee of directors to undertake various steps in this regard.

According to media reports, Japan's MUFG was in talks to pick up a minority stake in HDB Financial Services ahead of the IPO, but the discussions did not proceed.

HDFC Bank owns 94.64 per cent stake in HDB Financial Services which is a leading NBFC operating in two business verticals - lending and BPO. The firm has more than 1680 branches spread across 27 states & 4 union territories, according to its website. As per the 2023-24 annual report, the firm clocked revenues, profit after tax and assets under management of Rs 14,171 crore, Rs 2,461 crore and Rs 90, 235 crore respectively.