HDB Financial shares extend gains a day after stock market debut

HDB Financial Services share price rose 4% today, June 3, following a solid stock market debut a day ago. HDB Financial Services share price opened at ₹840.70 apiece on the BSE; therefater the stock touched an intraday high of ₹870.50, and an intraday low of ₹840.65 per share.

HDB Financial Services share price saw a strong listing day action on the bourses on July 2. 

On NSE and BSE, HDB Financial Services share price opened at ₹835 per share, 12.84 % higher than the issue price of ₹740. At the end of HDB Financial Services IPO listing day, it was at ₹840.25 on NSE, a 13.55% premium to the IPO price of ₹740, and at ₹840.90 on BSE, a 13.64% premium.

"HDB Financial, backed by a robust parent company, has achieved an impressive market debut, and its success is sure to inspire other companies considering an IPO to explore the public markets," remarked Mahesh Ojha, assistant vice president of research and business development at Hensex Securities.

Ojha noted that there is significant potential for growth for the lender, highlighting its strong fundamentals, which include low gross non-performing assets, an annual profit growth rate of 5.4%, and an extensive distribution network.

The company, a subsidiary of India's leading private bank HDFC Bank, offers a range of services including personal, home, vehicle, and gold loans, among others. It was aiming for a valuation of $7.1 billion. 

The IPO saw heightened interest from qualified institutional buyers such as foreign investors and mutual funds, whose applications exceeded the shares set aside for them by 55 times, added Mahesh Ojha.

HDB Financial Services IPO details

HDB Financial Services IPO opened for subscription on Tuesday, June 24, and closed on Thursday, June 26. HDB Financial Services IPO subscription status on the last bidding day was 16.69 times. The company fixed a price band of ₹700 to ₹740 per share for its IPO.

The IPO consisted of a fresh issue of ₹2,500 crore along with an offer for sale of ₹10,000 crore from HDFC Bank.

The net proceeds are intended to be used to enhance the company's Tier-I Capital base, allowing them to fulfill future capital needs for their various business segments, including Enterprise Lending, Asset Finance, and Consumer Finance. These needs are anticipated to emerge from the growth of the company's operations and assets, and to maintain adherence to the capital adequacy regulations established by the RBI as they may evolve.

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