HDFC Bank Approves HDB Financial Services IPO: A New Era for NBFCs

HDFC Bank's board has approved the IPO of its subsidiary, HDB Financial Services, as part of regulatory requirements. The IPO includes a fresh share issue worth up to Rs 2,500 crore and an offer for sale by existing shareholders. The listing follows the Reserve Bank of India's mandate for NBFCs in the 'upper layer' to go public.

HDFC Bank, on Friday, announced that its board has granted in-principle approval to commence the listing process for the equity shares of its subsidiary, HDB Financial Services.

The board sanctioned the proposal for an initial public offering (IPO) of equity shares for HDB Financial Services, featuring a fresh issue of shares up to Rs 2,500 crore. This decision was disclosed in a regulatory filing by HDFC Bank.

Additionally, the board approved an offer for sale of equity shares by existing and eligible shareholders, pending approval from company shareholders, favorable market conditions, and other necessary clearances.

The parent entity also endorsed amendments to the company's articles of association and employee stock option schemes to meet regulatory requirements. HDFC Bank holds a 94.64% stake in HDB Financial Services, which reported a net worth of Rs 13,300 crore for the June quarter.

The IPO decision aligns with the Reserve Bank of India's October 2022 mandate for upper-layer NBFCs to list on stock exchanges. The approval follows the successful listing of Bajaj Housing Finance, with Tata Capital Financial Services and Aditya Birla Finance also expected to float public issues soon.

(With inputs from agencies.)