HDB Financial Services shares will be listed in the Indian stock market today after the company’s initial public offering (IPO) received strong response from investors. HDB Financial Services IPO listing date is today, 2 July 2025.
Ahead of HDB Financial Services share listing today, brokerage firm Emkay Global Financial Services initiated coverage on HDB Financial Services with a bullish outlook, assigning a ‘Buy’ rating and a target price of ₹900 per share for June 2026. This implies a potential upside of 22% from the IPO issue price.
Strong Fundamentals, Diversified Lending Model
Emkay’s optimistic view is underpinned by HDB Financial Services’ highly diversified and granular lending portfolio, with the top 20 accounts constituting just 0.34% of its assets under management (AUM). The company caters to over 19 million customers and has a wide geographical reach, operating through 1,770 branches across 31 states and union territories.
The brokerage highlighted the HDB Financial Services’ strategic focus on direct loan sourcing — accounting for around 82% of FY25 disbursements — and a strong presence in underserved areas, with 70% of its branches located in tier-4 towns and beyond. The company’s target customer base includes low-to-mid income groups with limited or no credit history.
“HDB Financial Services has been built from the ground up, having successfully navigated multiple credit cycles including the pandemic. Its seasoned top management, most of whom have been with the company for over a decade, reflects strong execution and strategic consistency,” Avinash Singh, Senior Research Analyst at Emkay Global Financial Services said in a report.
Backed by HDFC Bank Legacy
HDB Financial Services benefits from the strong parentage of HDFC Bank, which has provided not just brand visibility but also a stable source of capital and competitive borrowing costs. This backing, combined with the company’s focus on profitable growth, has enabled HDB Financial Services to scale operations without raising external capital since 2017.
Emkay analyst pointed out that despite shocks such as demonetisation, GST implementation, and the COVID-19 pandemic, HDBFS has consistently reported profits since 2009-10.
Growth Outlook and Financial Strength
The brokerage expects HDB Financial Services to deliver 20% AUM CAGR and 27% EPS CAGR over FY25-28, driven by its strong origination network, improving capital adequacy post-IPO, and a favourable interest rate environment. With the Reserve Bank of India (RBI) expected to implement frontloaded repo rate cuts, net interest margins (NIMs) are likely to expand, further boosting profitability.
The brokerage firm projects HDB Financial Services to achieve return on assets (RoA) and return on equity (RoE) of 2.7% and 17% respectively by FY28. The company’s high operating expenses, due to its direct origination model, are expected to be offset by relatively higher net yields.
Key Risk: RBI Draft Circular
Emkay report also flagged a key regulatory risk. The RBI’s draft circular issued in October 2024 proposes that banks and their subsidiaries must not overlap in business activities. If implemented, this may compel HDFC Bank to reduce its stake in HDB Financial Services to below 20% within a specified timeframe, potentially altering the company’s strategic direction.
Despite this risk, Emkay believes the strong fundamentals, stable leadership, and consistent financial performance position HDB Financial Services for a gradual re-rating in the market.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
