India’s revised growth rate estimates might have weighed on sentiment but HDB Financial Services is entering the public markets with a plan built for caution, granularity and cycle management. Speaking to Moneycontrol at the company’s listing ceremony on July 2, G Ramesh, MD & CEO of HDB Financial, said that India’s GDP trajectory will play a decisive role in shaping the company’s pace of expansion.
“The big risk we think is a game changer is India’s growth,” Ramesh said. “When India grows upwards of 7 percent, our balance sheet expands faster. When growth slows, we moderate. It’s a conscious calibration based on real-time indicators.” Therein, indicating that HDB’s FY26 strategy will be guided by micro-market signals.
Strong debut in a tough IPO climate
HDB Financial’s Rs 12,500 crore IPO - India’s largest from a non-bank lender and the biggest public offer since LIC - garnered over 22 lakh retail applications, despite muted grey market signals ahead of listing. The stock debuted at a 13 percent premium to its issue price of Rs 410 on 2 July, bucking the trend of recent large IPOs like Ola Electric and Swiggy that are trading below issue price.
“We are not a start-up. We are a 17-year-old company with Rs 1.7 lakh crore in AUM and 19 million customers. The listing is a milestone, not an end in itself,” he said.
Over the last three years, HDB Financial has grown at a 20 per cent CAGR. While the company is not offering a forward guidance, Ramesh said that range is “a number we are comfortable with” - provided India’s macro tailwinds hold.
“We are fundamentally a risk management business,” he said, highlighting HDB’s three-pronged diversification model - across customers, products and geographies - as a buffer against economic volatility.
The company’s top 20 borrowers account for just 0.34 per cent of its AUM. Its product mix is well balanced too: enterprise lending accounts for around 40 per cent, asset-backed loans 37 per cent, and consumer finance around 23 per cent. Ramesh said the ideal book could organically evolve into a one-third mix over time, though there is no rigid target.
“We’re a customer company, not a product company. We don’t chase fixed product allocations. Capital is allocated annually based on real-time signals across micro-markets,” he said, adding that HDB tracks indicators like vehicle sales and regional consumption patterns to steer growth dynamically.
Margin steady, but RoA in focus
With over 70 per cent of its loan book on fixed rates, HDB is well-positioned to benefit from the current rate cut cycle. The company expects its historical NIM range of 7.6 to 8 per cent to hold. However, its return on assets (RoA) - a metric where many peers score higher - has stayed in the 2 to 3 per cent range in recent years.
“Our focus is on improving RoA through better product-customer segmentation and capital allocation. But ultimately, we are building for long-term stakeholder value,” Ramesh said.
HDB’s book remains largely secured, with a 73:27 secured-to-unsecured mix as of March 2025. That is expected to broadly hold for FY26, based on the company’s internal tactical capital allocation.
When asked what investors may be missing about the company, Ramesh pointed to HDB’s DNA of pre-planned diversity. "We didn’t start off as a regional or single-product player and then diversify out of necessity. From the beginning, we built to scale - ensuring we could engage with customers across both business and personal needs,” he said.
With financial markets now favouring fundamentals and stability over flashy narratives, HDB’s ability to ride out economic cycles while staying retail-focused could turn into its strongest re-rating lever.
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