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Salient features of the IPO:

• HDB Financial Services Ltd. (HFSL), is one of the leading, diversified retailfocused non-banking financial companies (NBFCs) in India in terms of total gross loan book size, is coming up with an IPO to raise around Rs. 12,500cr, which opens on 25th Jun. and closes on 27th Jun. 2025. The price band is Rs. 700 - 740 per share.

• The IPO is a combination of fresh issue (Rs. 2,500cr) and OFS portion (of Rs. 10,000cr). The company will not receive any proceeds from the OFS portion. The net proceeds from the fresh issue will be utilized to augment the Company’s Tier-I capital base, supporting its future capital requirements, including onward lending across its business verticals i.e. Enterprise Lending, Asset Finance, and Consumer Finance.

• One of the promoter & promoter group (P&PG) entities is participating in the OFS and is offloading 13.514cr equity shares. Post-IPO, the P&PG and public shareholders will have 74.19% and 25.58% stake in the company, respectively.

Key competitive strengths:

• Highly granular retail loan book, bolstered by a large and rapidly growing customer base with a focus on serving the underbanked customer segments

• Large, diversified and seasoned product portfolio with a sustainable track record of diversification, growth and profitability through the cycles

• Tailored sourcing supported by an omni-channel and digitally powered pan-India distribution network

• Comprehensive systems and processes contributing to robust credit underwriting and strong collections

• Advanced technology tools driving enhanced customer experience and efficiency across each stage of the customer lifecycle

• High-quality liability franchise with access to low cost, diversified borrowing sources and the highest credit rating

Risk and concerns:

• General slowdown in the global economic activities

• Business may be adversely affected by seasonal trends in the Indian economy

• The company's financial performance is sensitive to interest rate fluctuations

• The company operates under strict regulations governing India's financial services industry

• Competition

Below are the key highlights of the company:

• Incorporated on June 4, 2007, HFSL is the seventh-largest diversified, retail-focused NBFC in India based on total gross loan book as of March 31, 2024, according to the RHP. Classified as an Upper Layer NBFC (NBFC-UL) by the RBI, the company offers a broad portfolio of lending products, catering to a growing and diverse customer base through an extensive omni-channel distribution network.

• HFSL is a subsidiary of HDFC Bank, India’s largest private sector bank. Despite its strong parentage, HFSL operates independently across key functions such as sourcing, underwriting, operations, and risk management. Leveraging the brand strength of HDFC Bank, HFSL is wellpositioned to pursue sustainable growth and profitability.

• The company offers its lending products through three key business verticals: Enterprise Lending, contributing 39.30% of the total gross loan portfolio as of March 31, 2025; Asset Finance, accounting for 38.03%; and Consumer Finance, comprising the remaining 22.66%.

• HFSL is a diversified NBFC focused on maintaining an optimal product mix with a balanced approach between secured and unsecured lending. As of March 31, 2025, secured loans accounted for 73.01% of the total gross loan book, while unsecured loans constituted 26.9

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