Subscribe for HDB Financial Services Ltd IPO; Geojit Financial Services

Geojit Financial Services, has come out with its report on HDB Financial Services Ltd. The research firm has recommended to “ Subscribe” the ipo in its research report as on June 24, 2025.

Broker Research

June 25, 2025 / 11:38 IST

IPO

Geojit Financial Services, HDB Financial Services Ltd

HDB Financial Services Ltd (HDB), established in 2007, is a retail-focused, upper-layer NBFC as classified by the RBI. It operates across three lending segments—enterprise (~39%), asset finance (~38%), and consumer finance (~23%)—primarily serving low- to middleincome customers with limited credit histories. As of March 31, 2025, the average loan ticket size stood at ~₹1.65 lakh. HDB also provides BPO services to its promoter and distributes insurance products to their borrowers. Its extensive network includes 1,771 branches across 1,170 locations in 31 states and union territories, with over 80% in non-metro areas and more than 70% in Tier-4 and smaller towns. As of FY25, India’s NBFC sector reported an AUM of ₹48 trillion, having grown at a CAGR of 13.2% since FY19, and is expected to grow at 15–17% over FY25–FY28, driven by growth across retail, MSME, and corporate segments. (source: CRISIL Intelligence). The total gross loans of HDB grew at a CAGR of 23.5% over FY23-25 and stood at ₹1,068.8 bn as of March 31, 2025. The loan portfolio is highly granular, with the top 20 customers accounting for less than 0.34% of total gross advances.

Valuation and Outlook

Given its diversified lending portfolio, strong parentage support, omni-channel distribution platform, granular lending model, customer expansion, asset quality and better growth prospects, we recommend a "Subscribe" rating on a long term basis.

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