HDB Financial to test investor appetite in dull IPO market

Focus now shifts to business fundamentals, comparison with peers such as Bajaj Finance

- Abhinaba Saha

DB Financial Services Ltd's ₹12,500 crore initial public offering, the largest so far this year, will test investor appetite for fresh offers in a dull market.

The three-day initial public offer (IPO), which opens on Wednesday, has priced shares of the non-banking financial company (NBFC) at ₹700-740 apiece. While that was a 40% discount to its grey market price before the IPO was announced, prices in the two markets have converged. The focus now shifts towards its fundamentals.

With one of the lowest return on assets (RoA) among key listed peers in FY25, HDB's profitability lags that of its competitors because of the rising cost of operations and managing bad loans, its red herring prospectus showed.