HDB Financial IPO Coming Soon! A Value Buy or Expensive? Deep Analysis

As the HDB Financial IPO coming soon, we are providing a deep-dive valuation comparison between HDB Financial and listed NBFC giants like Bajaj Finance, Chola, and Sundaram.

In a market teeming with IPOs, the upcoming listing of HDB Financial Services, a subsidiary of HDFC Bank, stands apart. Backed by blue-chip pedigree, a INR 1 lakh crore loan book, and a digital-first model, HDB is gunning for a INR 97,483 crore valuation in the unlisted market. But the question investors must ask: Is it a bargain, or is the Bajaj Finance comparison overdone?

📚 A 17-Year Journey to IPO Readiness

Founded in 2007, HDB Financial has quietly built one of India’s largest and most geographically distributed NBFCs. What started as an HDFC Bank-backed offshoot has grown into a lending powerhouse, serving over 19 million customers, with 1,771 branches and a presence in Tier 2–3 cities that rivals the biggest lenders.

HDB Financial IPO isn’t just regulatory compliance — it’s a milestone in HDFC Group’s institutional roadmap, finally unlocking value from a matured franchise long operating in the shadows.

💹 HDB Financial Valuation at a Glance

Based on the latest unlisted share price of INR 1,235 per share and FY25 results:

• Market Cap: INR 97,483 crore
• EPS (FY25): INR 27.32
• Book Value (FY25): INR 198.80
• Implied P/E Ratio: ~44.8×
• Implied P/B Ratio: ~6.16×

📊 Peer Comparison: Valuations & Profitability

Metric	HDB Financial (Unlisted)	Bajaj Finance	Cholamandalam	Sundaram Finance
AUM (INR Cr)	1,06,878	4,16,661	1,99,000	1,42,313
PAT (INR Cr)	2,176	4,546	4,313	1,543
ROA (%)	2.16	4.60	3.30	2.16
ROE (%)	14.72	19.10	19.80	14.72
GNPA (%)	2.26	0.96	3.97	1.62
P/E Ratio	44.8×	35×	31×	20×
P/B Ratio	6.16×	6.0×	5.5×	3.0×

Read Also: HDB Financial Business Model Analysis: Potential to Double in 4 Years! Here’s the Full Breakdown

Narrative: Solid Fundamentals, Stretched Valuation?

HDB Financial isn’t just another NBFC:

• INR 16,300 Cr in revenue
• 1.7K+ branches
• 3.7 Mn new customers in FY25
• 97% of loans sourced digitally

Yet, with a lower ROA (2.16%) and only moderate net margin (13.35%), its valuation rivals Bajaj Finance, which delivers nearly double the ROA and stronger digital leverage.

⚠️ Red Flag:

“At a P/E of ~45× and P/B over 6×, HDB is already priced like a high-growth fintech—without the margin profile of one.”

🆚 Bajaj Finance vs. HDB Financial: Gap Between Rivals

Category	Bajaj Finance	HDB Financial
ROA	4.6%	2.16%
Digital Adoption	100% (AI-powered)	97% (phygital model)
GNPA	0.96%	2.26%
AUM Growth	26% YoY	18.5% YoY
Retail Power	Deep penetration + x-sell	Focused Tier 2–3 base

While HDB has strong fundamentals, Bajaj’s numbers justify its premium better.

Liked our analysis? You may also be interested in: HDB Financial IPO – What Do We Know So Far

HDB Financial IPO Valuation Sensitivity Table: Investor Lens at a Glance

To evaluate HDB Financial IPO valuation rationally, we use the company’s FY25 reported net profit of INR 2,175.92 crore and total outstanding shares of 79.58 crore to derive an EPS of INR 27.32.

Using this EPS, we project implied valuation metrics across various IPO size scenarios — from conservative to aggressive — to help investors gauge whether the offering is priced fairly.

IPO Valuation (INR Cr)	Implied P/E	Earnings Yield (%)
22,000	10.1×	9.90%
25,500 (GMP-based)	11.7×	8.55%
28,000	12.9×	7.75%
30,000	13.8×	7.25%

As the HDB Financial IPO valuation rises, implied returns diminish — while the growth narrative must do increasingly heavy lifting.

Read Also: HDB Financial Unlisted Share Buyers Get Rude Shock: Trapped and Down 40%

🧮 So, Is HDB Overvalued? Depends on Your Lens

At INR 1,225 per share in the unlisted market, HDB Financial is commanding a valuation of approximately INR 97,483 crore — translating to a P/E of ~44.8× and a P/B of ~6.2×, based on FY25 audited earnings (EPS INR 27.32, Book Value INR 198.80). That’s rich — even by high-quality NBFC standards — and raises a fair question:

📐 What’s a Fair Price for HDB Financial IPO? A Ground-Up Approach

Using comparative peer multiples and internal metrics, we estimate a fair value range using both P/E and P/B benchmarks.

Valuation Basis	Multiple Benchmark	Justification	Implied Price Range (in INR)
P/E Fair Multiple	30×–35×	Slight discount to Bajaj Finance’s 35×	820 – 960
P/B Fair Multiple	4.5×–5.5×	In line with Chola (5.5×), below Bajaj (6×)	895 – 1,095
Median Fair Value	Blend of both	Balanced ROE and digital growth outlook	940 – 1,020

🔮 Forward Valuation: Where Might It Go?

Assuming HDB grows earnings at a 15% CAGR, its FY27 EPS could touch INR 36.2. At today’s implied price of INR 1,225/share, the forward P/E would moderate to ~33.8×, closer to the current multiple for Bajaj Finance.

This suggests that much of the next 2 years’ growth is already priced in. Any rerating will need to be driven by a sustained improvement in ROA or a positive surprise in profitability.

🎯 What’s the Sweet Spot?

• ✅ INR 900 – 1,000 per share: Rationally valued, offering scope for upside.
• ⚠️ INR 1,050 – 1,150: Fully priced — listing gains likely muted.
• ❌ INR 1,200+: Aggressively priced — betting on perfection.

📝 Final Verdict: Great Company, But is it a Great Price?

HDB is rock solid. It offers:

• Proven credit underwriting
• Rural Tier 2–3 growth
• Low delinquencies
• Tech-enabled scalability
• And HDFC’s unmatched trust premium

But it’s not cheap. At ~45× earnings, you’re buying into a well-managed lender with stable — not explosive — metrics.

“HDB isn’t the flashiest NBFC — and it’s not pretending to be. But in a market chasing hype and unicorns, it offers something rarer: a durable credit franchise with institutional pedigree and modest upside — if priced right.”

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