HDB Financial Services, the retail-focused NBFC arm of HDFC Bank, is making big waves in the lending space. With a strong push towards underbanked markets and a deep, omnichannel presence, the company is rapidly expanding across India.
As of March 2025, HDB’s assets under management (AUM) stood at ₹1,07,260 crore — growing at a healthy CAGR of 23.71% since March 2023. The customer base has also jumped significantly, reaching 19.2 million with a 25.45% CAGR. The company’s core strength lies in serving low to middle-income households, often with little or no credit history.
A Diverse Loan Portfolio for Bharat
HDB Financial Services operates through three key segments — Enterprise Lending, Asset Finance, and Consumer Finance.
- Enterprise Lending, which includes MSME loans, makes up 39.30% of the loan book.
- Asset Finance, offering loans for commercial vehicles and equipment, holds 38.03%.
- Consumer Finance, with loans for electronics, two-wheelers, and personal use, contributes 22.66%.
The company has strategically placed 80% of its branches outside India’s top 20 cities. Over 70% are in Tier 4+ towns, serving salaried individuals, small business owners, and entrepreneurs. The average loan size is just ₹1.65 lakh, keeping the loan book granular and less risky.
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Technology Meets Trust
HDB Financial Services has invested heavily in technology. Over 95% of its customers are sourced and onboarded digitally. Collections are also largely digital. The company uses automated credit decision-making, improving speed and reducing risk.
Their hybrid “phygital” model combines physical branches, tele-calling, and digital channels. With 1,771 branches across 1,170 towns and cities, HDB is truly pan-India. It also partners with over 140,000 retailers and dealers, and 80+ major brands and OEMs.
Financial Health & IPO Buzz
In FY2025, HDB Financial Services reported a net profit of ₹2,176 crore. Despite a slight dip from FY2024 due to higher provisions, its return on assets (2.16%) and return on equity (14.72%) remain solid. The company has a strong credit rating of AAA/stable from CRISIL and CARE, helping keep borrowing costs low at 7.90%.
Now, HDB is hitting the stock market. The IPO opens on 25 June 2025 and closes on 27 June 2025. It includes:
- A fresh issue of ₹2,500 crore
- An offer for sale worth ₹10,000 crore by HDFC Bank
- Post-IPO, HDFC Bank’s holding will fall from 94.04% to 74.2%
The IPO proceeds will be used to strengthen the capital base and comply with RBI’s listing rules for large NBFCs.
Strengths and Caution
The company’s strengths include strong parentage, a wide loan mix, digital-led operations, and deep rural reach. However, rising NPAs, growing exposure to new-to-credit borrowers, and regulatory pressures on promoter shareholding remain concerns.
Yet, with its tech-first approach, diversified portfolio, and massive underserved market focus, HDB Financial Services appears well-positioned for the long haul.
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