IPO-bound HDB Financial stock soars in unlisted market
HDB Financial Services heads for its initial public offering (IPO), shares of the nonbank lender owned by the country’s most-valued bank in the unlisted market have seen a sharp rise — up to ₹1,200 apiece.
After the IPO plan was announced, the shares rose to a high of ₹1,400 apiece before settling at ₹1,200. However, brokers in the unlisted market say the euphoria is not justified as they expect the IPO to be priced around ₹750-₹800.
“HDB Financial has shown strength in the unlisted space in light of over-optimism and IPO announcements, but investors are being too bullish on the same by giving it a higher valuation as it belongs to HDFC group,” said Rahul Thalia, director of Sarffin Financial Advisors.
The prices in the unlisted markets went up to ₹1,450 from ₹850 to ₹900 levels in the last nine months. At this price, the stock is valued at a price-to-earnings ratio (P/E) of over 45 times versus an industry average of 28 times.
The book value per share for the fiscal year 2024 stood at ₹175 and for the half year of FY25 hovers around ₹187.
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