HDFC Bank’s HDB Financial nears SEBI approval for $1.5 billion IPO

At $1.5 billion, it would be the country’s largest IPO ever for a shadow bank

HDB Financial Services Ltd. is close to securing the go-ahead from India’s securities regulator for its initial public offering, according to people familiar with the plan, which would allow the shadow lender to launch one of the country’s biggest listings this year.

The Securities and Exchange Board of India’s approval is set to be made public in the coming weeks, the people said, asking not to be named discussing a private matter. The company is making plans to kick off the process of engaging with prospective investors next month, one of the people said.

SEBI didn’t respond to an email seeking comment and a call to HDB Financial went unanswered. The approval would clear the way for the unit of HDFC Bank Ltd., the country’s biggest private sector lender, to finally proceed with a deal that may fetch $1.5 billion, after months of waiting for regulatory clearance. It would test the Indian IPO market’s ability to revive some of the spark seen last year, when it was one of the world’s busiest places for new listings.

At $1.5 billion, it would be the country’s largest IPO ever for a shadow bank and the biggest one among all sectors since Hyundai Motor India Ltd.’s $3.3 billion deal last year. South Korea’s LG Electronics Inc. was planning to take its Indian unit public this year but it paused work on it amid the market turmoil triggered by India’s slowing economic growth and US tariffs.

HDB Financial’s listing is expected to be followed by even bigger ones. Tata Capital Ltd. submitted preliminary documents with India’s markets regulator last month to raise as much as $2 billion.