Can HDB Financial Services maintain its momentum after a strong IPO listing?
ADVERTISEMENT The IPO comprised a fresh issue of ₹2,500 crore with an offer for sale of ₹10,000 crore by HDFC Bank. HDB Financial Services is the most subscribed billion-dollar IPO since the Zomato issue four years ago, and the largest non-banking financial company (NBFC) IPO so far.
Analysts said investors can choose to hold the stock from a long-term view of 2-3 years while fresh investors can wait for dips to buy.
"The listing was better than expected primarily due to better market sentiment led by investors relying on HDFC Bank's strong parentage," said Manish Chowdhury, head of research, StoxBox. "The listing gains were capped due to sluggish FY25 performance, especially on margin and asset quality fronts."Investors can choose to hold for a period of one year and fresh investors can wait on sidelines for the quarter results and take cues from the management commentary, he said.
"While Bajaj Finance is trading at higher levels compared to HDB Financial Services, the other NBFC players are trading at cheaper valuations," said Chowdhury.
ADVERTISEMENT HDB Financial's IPO was subscribed 16.69 times on the final day of bidding on Friday.The qualified institutional buyers (QIBs) portion was subscribed 55.47 times, while the non-institutional investors (NIIs) or high-net-worth individuals' portion and the retail investors portion were subscribed at 9.99 times and 1.41 times, respectively.
ADVERTISEMENT The NBFC's market capitalisation on Wednesday was Rs 69,704.3 crore while the market value of its largest peer, Bajaj Finance stood at Rs 5.73 lakh crore. Analysts said the company's peer Bajaj Finance has been able to maintain high growth and high asset quality which HDB hasn't been able to achieve. 'Investors are advised to exit post listing gains as the company's financials aren't that great relative to its peers,' said Dharmesh Kant, head of research, Cholamandalam Securities. 'While other NBFC stocks are expensive, the relative growth trajectory is also likely to be better which makes them a better bet.' Despite good issue price, HDB Financial Services needs to demonstrate strong growth in consumer finance which makes up almost 24% of its book and remains a grey area for the company,' he said
ADVERTISEMENT
Kant said investors can wait for a better opportunity to buy HDB Financial services and also for the other NBFCs where the valuations have not cooled off yet. Emkay Global initiated coverage on the stock with a 'Buy' rating and target price of Rs 900-implying an upside potential of 7.11% from Wednesday's closing price. Analysts said investors can hold the stock from a 2-3-year perspective as HDB Financial Services is a structurally constructive bet. 'Despite trading at a discount to Bajaj Finance and Cholamandalam Finance, HDB Financial Services is an upper layer NBFC that offers a well-diversified portfolio and a granular loan book that makes it a long term buy for new investors as well,' Shweta Daptardar, VP — institutional equity research, Elara Securities.
ADVERTISEMENT Daptardar said fresh investors can accumulate on dips as no returns are expected on an immediate basis, however, no sizable corrections are likely as higher liquidity and low-interest rate scenarios offer better landscape for NBFCs such as HDB Financial Services.
(You can now subscribe to our ETMarkets WhatsApp channel)
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Economic Times
31 minutes ago
- Economic Times
Indian biscuits, shampoos & poha go global: FMCG exports outpace domestic sales for HUL, Dabur and others
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Popular in Cons. Products Kolkata: Smartphones may have sizzled their way to become the country's largest exported goods in the last fiscal year, but Indiamade daily use consumer goods such as biscuits, noodles, packaged gram flour, soaps and shampoos are also rapidly making inroads into global shelves. Top fast-moving consumer goods companies like Hindustan Unilever (HUL), ITC Dabur and AWL Agri Business (formerly Adani Wilmar) have reported faster growth in their export revenue compared with local sales in the past two fiscal international business accounts for only 3% of the turnover for some like HUL due to their very large domestic operations, it brings more than 20% of the revenue for companies such as Dabur, Emami and Marico. Unilever India Exports Ltd, HUL's wholly owned subsidiary for exports to other Unilever companies globally, posted an 8% increase in sales at Rs 1,258 crore in the last financial year ended March 31, according to HUL's annual report. Its net profit rose 14% to Rs 91 total sales, meanwhile, grew at a tepid pace of 2%, weighed by weak domestic company attributed the export growth to products in skin care, lifestyle nutrition, hair care and personal wash, driven by brands like Dove, Horlicks, Vaseline, Pears, Bru, Sunsilk, Glow and Lovely, Pond's, Lakme and Lifebuoy. It's not just basmati rice, traditionally a top commodity for exports from India, which is in high demand, said Angshu Mallick, chief executive at AWL Agri Business, India's largest packaged edible oil company. Mustard and sunflower oil, atta, besan (gram flour), soya nuggets and poha (flattened rice) all are seeing strong demand in foreign markets, he said.'We are just scratching the surface. The proliferation of Indian restaurants and popularity of Indian cuisines in the West is driving the exports. And it's not just the Indian diaspora but even the local people (in foreign markets) are buying these,' said Mallick, predicting that exports could rise 50-80% this fiscal demand is strong, a push from the government through export-focussed programmes like production-linked incentive schemes (PLI) for the food processing industry and millet-based products are also helping boost shipments, industry executives said. The government in December said it had selected 73 companies for benefits under the PLI scheme for marketing Indianbranded food products in global said in its latest annual report that its branded export business grew threefold in the past three years to cross Rs 250 crore in FY25. Godrej Consumer Products said in an investor presentation that the operating margin of its international business expanded to 17% in FY25 from 10% two years told analysts recently that its export business is scaling up fast and it posted 14% growth in constant currency terms (excluding the impact of currency movements) in FY25, compared with overall growth of 12%. At Dabur, exports grew 17% against a 1.3% expansion in consolidated revenue. ITC Ltd said in its latest annual report that the company is seeing 'green shoots' in exports of biscuits, noodles and snacks while its Aashirvaad Atta is already the market leader in several countries. 'ITC is also exploring strategic opportunities in proximal markets as a potential vector of growth going forward,' it a bulk of ITC's foreign exchange earnings from export is still driven by agri-commodities export revenue rose 7% to Rs 7,708 crore in FY25 — its FMCG export is set to become the next growth driver. The firm said its FMCG products are now sold in over 70 countries. Exports of other consumer goods from apparel, jewellery and consumer electronics to automobiles have also grown last fiscal year.
Time of India
an hour ago
- Time of India
Indian biscuits, shampoos & poha go global: FMCG exports outpace domestic sales for HUL, Dabur and others
Kolkata: Smartphones may have sizzled their way to become the country's largest exported goods in the last fiscal year, but Indiamade daily use consumer goods such as biscuits, noodles, packaged gram flour, soaps and shampoos are also rapidly making inroads into global shelves. Top fast-moving consumer goods companies like Hindustan Unilever (HUL), ITC , Marico , Godrej Consumer Products , Dabur and AWL Agri Business (formerly Adani Wilmar) have reported faster growth in their export revenue compared with local sales in the past two fiscal years. While international business accounts for only 3% of the turnover for some like HUL due to their very large domestic operations, it brings more than 20% of the revenue for companies such as Dabur, Emami and Marico. Unilever India Exports Ltd, HUL's wholly owned subsidiary for exports to other Unilever companies globally, posted an 8% increase in sales at Rs 1,258 crore in the last financial year ended March 31, according to HUL's annual report. Its net profit rose 14% to Rs 91 crore. HUL's total sales, meanwhile, grew at a tepid pace of 2%, weighed by weak domestic demand. The company attributed the export growth to products in skin care, lifestyle nutrition, hair care and personal wash, driven by brands like Dove, Horlicks, Vaseline, Pears, Bru, Sunsilk, Glow and Lovely, Pond's, Lakme and Lifebuoy. It's not just basmati rice, traditionally a top commodity for exports from India, which is in high demand, said Angshu Mallick, chief executive at AWL Agri Business, India's largest packaged edible oil company. Mustard and sunflower oil, atta, besan (gram flour), soya nuggets and poha (flattened rice) all are seeing strong demand in foreign markets, he said. 'We are just scratching the surface. The proliferation of Indian restaurants and popularity of Indian cuisines in the West is driving the exports. And it's not just the Indian diaspora but even the local people (in foreign markets) are buying these,' said Mallick, predicting that exports could rise 50-80% this fiscal year. While demand is strong, a push from the government through export-focussed programmes like production-linked incentive schemes (PLI) for the food processing industry and millet-based products are also helping boost shipments, industry executives said. The government in December said it had selected 73 companies for benefits under the PLI scheme for marketing Indianbranded food products in global markets. AWL said in its latest annual report that its branded export business grew threefold in the past three years to cross Rs 250 crore in FY25. Godrej Consumer Products said in an investor presentation that the operating margin of its international business expanded to 17% in FY25 from 10% two years earlier. Marico told analysts recently that its export business is scaling up fast and it posted 14% growth in constant currency terms (excluding the impact of currency movements) in FY25, compared with overall growth of 12%. At Dabur, exports grew 17% against a 1.3% expansion in consolidated revenue. ITC Ltd said in its latest annual report that the company is seeing 'green shoots' in exports of biscuits, noodles and snacks while its Aashirvaad Atta is already the market leader in several countries. 'ITC is also exploring strategic opportunities in proximal markets as a potential vector of growth going forward,' it said. While a bulk of ITC's foreign exchange earnings from export is still driven by agri-commodities export revenue rose 7% to Rs 7,708 crore in FY25 — its FMCG export is set to become the next growth driver. The firm said its FMCG products are now sold in over 70 countries. Exports of other consumer goods from apparel, jewellery and consumer electronics to automobiles have also grown last fiscal year. Economic Times WhatsApp channel )
Indian Express
an hour ago
- Indian Express
DJB can now sanction high-cost projects without Cabinet nod
A move that could significantly remove administrative hurdles previously faced by the Delhi Jal Board (DJB), the Delhi government on Saturday granted financial autonomy to the civic agency, enabling it to independently approve high-cost projects, including ones exceeding Rs 50 crore. The decision was announced by Chief Minister Rekha Gupta, who called it a 'historic step' towards ensuring faster implementation of critical schemes related to Yamuna rejuvenation, drain management, and drinking water supply. 'Our government is committed to delivering result-oriented governance, not entangling people in paperwork,' Gupta was quoted as saying by the Chief Minister's Office (CMO) on Saturday. 'In a historic move, the Delhi government has, for the first time, empowered the Jal Board with real authority to take decisions and complete projects. The institution is no longer symbolic – it has now become truly autonomous and capable. The Board will no longer need to wait for Cabinet approval for projects worth crores of rupees,' stated the CMO in an X post on Saturday. 'This decision to enhance the financial powers of the Delhi Jal Board is not just an administrative reform — it is a revolutionary step towards making governance faster, more accountable, and results-driven. It will strengthen decision-making at every level, reduce delays, and make the system more transparent and responsible. This is a strong beginning in implementing Hon'ble Prime Minister Narendra Modi's vision of 'Minimum Government, Maximum Governance' on the ground in Delhi,' it added. According to the revised provisions, the DJB chairperson can now approve projects up to Rs 50 crore, while the chief executive officer can sanction proposals up to Rs 25 crore. Senior DJB officials handling administration, water supply, or drainage can clear projects worth up to Rs 5 crore. Also, other senior officials have been granted enhanced financial authority under the new system. The CMO noted that these changes aim to eliminate the long-drawn-out approval process that had previously delayed crucial infrastructure work. Gupta alleged that the earlier government had curtailed DJB's financial independence, leading to stagnation in Yamuna clean-up efforts, modernisation of drainage systems, and timely execution of drinking water supply projects. She said that the DJB had effectively been stripped of its powers, rendering it non-functional in critical areas. 'The Delhi Jal Board has now truly been made a 'Board' again,' Gupta said, adding that the restored powers would allow it to function with the autonomy and accountability expected of such an institution. 'This decision reflects the power of political will and shows that when the intent is clear, large-scale, people-centric reforms can be implemented swiftly and effectively.' The CM further said that the new framework would reduce the scope for corruption and decisions would be taken in a 'more transparent and accountable' manner. 'Solutions will now move quickly and projects will be implemented on the ground – not just announced,' Gupta said. The new system is expected to help fast-track the installation of sewage treatment plants, desilting infrastructure, pipelines, booster stations, and water supply mechanisms across the city. Sources said the DJB previously faced multiple issues, including having to float low-cost tenders to escape financial bottlenecks that arise with expensive projects. In 2024, the Finance department had also directed that all DJB projects must be geo-tagged before funds could be released – a step aimed at promoting transparency and real-time monitoring.
