HDB Financial Services is launching a big IPO worth ₹12,500 crore, one of the largest in the NBFC (Non-Banking Financial Company) sector in India. But nearly 50,000 early individual investors may face notional (unrealized) losses of up to 48%.
Why the Losses?
These investors had bought HDB shares earlier at prices between ₹1,200 and ₹1,350 per share. But now, the IPO is priced much lower — between ₹700 and ₹740 per share. This means their investments are worth much less on paper.
For example, an investor who bought 1 crore shares at ₹1,250 each would now see their investment value fall from ₹1,250 crore to ₹740 crore, losing about ₹510 crore on paper.
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Grey Market Expectations vs Reality
Before the IPO, the grey market (an unofficial market where shares trade before listing) had priced the shares around ₹1,250–₹1,300, raising expectations. But the official IPO pricing is much lower.
The company’s CEO, Ramesh G, explained that the price was set after detailed discussions with institutional investors. He said, “We cannot control what happens in the unlisted market.”
Details of the IPO
- The IPO includes a ₹2,500 crore fresh issue and a ₹10,000 crore offer-for-sale (OFS) by HDFC Bank, HDB’s parent company.
- HDFC Bank bought shares at just ₹46.4 per share. So at the IPO price of ₹740, it will earn a huge profit of around ₹9,373 crore (before tax).
The IPO is being launched because the RBI has made it mandatory for large NBFCs to be listed by September 2025. RBI is also planning to limit how much NBFCs can rely on their parent banks, which could affect future valuations.
Also See: HDFC’s Mega Move: India’s Largest NBFC IPO to Rock Dalal Street This June!
What This Means for Retail Investors
Even if big institutions show interest in the IPO, the steep price cut compared to the grey market may change how retail investors view pre-IPO investments in the future.
The IPO will open on June 25 and close on June 27.
