HDB Financial Services IPO Becomes Most Subscribed $1B Indian Offering in 4 Years

HDB Financial Services Ltd.'s $1.5 billion initial public offering is expected to become India's most sought-after big listing in at least four years, with strong bidding from both domestic and foreign investors.

According to data on the BSE's website, bids for the offering by the country's leading private bank's shadow lending business totalled slightly more than two billion shares as of Friday afternoon in Mumbai, compared to 130.4 million available shares.  Global investors, domestic mutual funds, and financial institutions accounted for the majority of the demand.

Individual investors who bid for more than 1 million rupees in shares were also among the largest supporters of the company.  The amount designated for small investors was also fully subscribed. 

The almost 15-fold demand for HDB shares is the highest since food delivery business Eternal Ltd.'s $1.4 billion IPO was oversubscribed more than 29 times, according to market data.

The share sale coincides with a resurgence in the benchmark NSE Nifty 50 Index, which may indicate a strong appetite for major Indian issuances in the future.  The index is now less than 5% below its top in September.

Some potentially larger transactions are planned later this year, including those involving Tata Capital Ltd. and LG Electronics Inc.'s domestic unit.

In 2024, India emerged as one of the world's busiest capital-raising marketplaces.  Following a lull, block trades, institutional share placements, and IPOs have increased. 

HDB Financial generated 33.7 billion rupees by allocating shares to anchor investors such as Life Insurance Corporation of India, the country's largest insurer, and domestic mutual funds.  Morgan Stanley and Allianz SE managed funds, among other worldwide investors.