The NBFC will also issue new equity shares worth Rs 2,500 crore in the IPO, taking the total issue size to around Rs 12,500 crore, the bank said in a notice to stock exchanges.
When launched, it will be considered the largest IPO by an NBFC in India till date.
HDFC Bank holds a 94.5% stake in the company.
“The board of directors of the bank, in its meeting held today on October 19, considered and approved the offer for sale of a face value of Rs 10 each of HDBFS, aggregating up to Rs 10,000 crore held by the bank in the public offer initial proposal, subject to market conditions, receipt of necessary approvals/regulatory clearances and other considerations,” the bank said.
The price and other details of the proposed initial public offering, which is the first for the group in six years, will be determined in due course, the bank said. The HDBFS IPO meets the Reserve Bank of India’s (RBI) regulatory requirements introduced in October 2022, which said upper layer NBFCs must be listed on the stock market by September 2025. The results released on Saturday showed that HDBFS’s net profit for the quarter ending September 2024 fell 2% to Rs 590 million from Rs 600 million a year. back.
The total loan portfolio of the non-deposit-taking NBFC was Rs 98.6 billion as on September 30, 2024, with stage three distressed loans at 2.10% of gross loans. Solvency stands at 19.3%.
HDBFS provides loans primarily to individuals and small businesses specializing in secured and unsecured loans, consumer loans and loans against property.
Proceeds from the IPO are likely to be used to expand its loan portfolio and improve digital infrastructure.
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