HDFC Bank’s HDB eyes i-banks for initial share sale: report

HDFC Bank Ltd’s non-banking finance arm, HDB Financial Services, is scouting for global merchant bankers for its initial public offering (IPO), The Economic Times reported, citing people aware of the talks.

The company is in preliminary talks with Bank of America Securities, Morgan Stanley, and Nomura, among others, the report said, adding that a final decision is likely in the next few weeks.

HDB Financial Services’ parent firm may dilute 10% of its stake to raise up to ₹10,000 crore (about $1.2 billion).

HDFC Bank gave HDB its nod to start the listing process last week, the report added.

HDFC Bank’s board gave its in-principal nod to initiate the process of listing HDB Financial Services on 20 July and appointed a committee to initiate the process and seek regulatory approvals.

HDB’s stock currently fetch ₹1,130-1,140 in the grey market, which translates to a valuation of up to ₹90,000 crore (about $10.7 billion), ET said.

Non-banking financial institutions in India are categorized according to their size and systemic importance, with firms in the top layer subjected to maximum scrutiny.

The Reserve Bank of India has categorized HDB in the upper layer of NBFCs, or the highest layer, which means that it needs to get listed before September next year under the regulatory guidelines.

HDFC Bank held a 94.6% stake in HDB Financial Services as on 31 March 2024, financial statements showed