HDB Financial Services, a subsidiary of India’s biggest private lender HDFC Bank, received the board’s nod for an initial public offering (IPO) of equity shares on Friday. The IPO will comprise a fresh issue of shares worth ₹2,500 crore and an offer for sale (OFS) by existing shareholders, HDFC Bank informed in an exchange filing.
The OFS of equity shares will be done by existing and eligible shareholders of the company who may offer to tender their equity shares. This will be subject to the shareholders’ approval, market conditions, receipt of applicable approvals, and other regulatory clearances and considerations, the statement added.
The board of directors also approved the amendments to articles of association of the company, the Employee Stock Option Scheme 2014, the Employee Stock Option Scheme 2017, and the Employee Stock Option Scheme 2022 to comply with regulatory requirements, the HDFC Bank said.
Currently, HDFC Bank owns a 94.6 per cent stake in its non-banking financial subsidiary.
IPO plans
On July 20, HDFC Bank announced that the board provided an in-principle approval to start the listing process of HDB Financial Services. The July 20 announcement comes after the Reserve Bank of India (RBI) mandated non-banking financial companies (NBFCs) in the “upper layer” of the system to list themselves publicly in the exchanges. The RBI issued the directive in October 2022.
Recently, HDFC Bank rejected a proposal by Mitsubishi UFJ Financial Group (MUFG), a Japanese lender, to purchase a stake in HDB Financial Services, Mint reported on September 4.
MUFG reportedly wanted to buy a 20 per cent stake in HDB Financial Services.
In Q1 FY25, HDFC Bank reported a decline of two per cent in its net profit at ₹16,175 crore from ₹16,511.9 crore in the same quarter the previous year.
The net interest income (NII), which is the difference between interest earned and interest paid, went up by 2.6 per cent from the previous quarter at ₹29,837 crore from ₹29,078 crore in Q4 FY24.