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Economic Times
25-06-2025
- Business
- Economic Times
HDB Financial IPO: Can HDFC Bank's midas touch break the mega IPO curse?
The Mega IPO Curse Strikes Deep Live Events HDFC Bank's Golden Child Steps Into the Arena Brokerage Houses Rally Behind the IPO The Liquidity Squeeze Test (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel As the Rs 12,500 crore IPO of HDB Financial Services hits Dalal Street today, investors are wondering whether the charm and pedigree of HDFC Bank will be enough to break the mega IPO jinx that has haunted primary market investors in the last 2 IPOs, those raising ₹10,000 crore or more, may dazzle at the starting line, but they've left a trail of investor heartbreak behind. According to Samco Securities, the last eight such offerings have returned an average negative 9% within a month of listing. Wait six months, and the bleeding worsens to -20%. A year in, the damage deepens to -25%.Paytm, once the poster child of India's fintech revolution, has obliterated 65% of investor wealth within 12 months of its ₹18,300 crore listing in November 2021. Life Insurance Corporation, despite its government backing and ₹21,008 crore raise in May 2022, has delivered a punishing 35% loss to shareholders who held for a more recent entrants haven't escaped the curse. Hyundai Motor's ₹27,870 crore IPO in October 2024, the largest in Indian history, has already slipped 7% in six months, while Swiggy's ₹11,327 crore listing showed early promise with 17% gains in the first month, only to surrender 30% over six months."In the last 25 years, India's mega-IPOs have often arrived at moments of peak market optimism, but with surprisingly poor follow-through," notes Samco Securities. "The pattern reflects a liquidity vacuum—massive IPOs absorb market capital, leaving little dry powder for secondary buying."Only SBI Cards stands as a rare exception, delivering 50% returns after 12 months from its ₹10,355 crore March 2020 listing, a performance achieved during an unprecedented pandemic-driven market Financial Services comes armed with impressive credentials that distinguish it from previous mega IPO failures. As the 7th largest diversified retail-focused NBFC in India with a gross loan book of ₹902.2 billion as of March 2024, the company benefits from the unassailable brand power of HDFC Bank, India's second-largest private IPO, priced between ₹700-₹740 per share, implies a valuation of approximately ₹61,000 crore at the upper end. The offering comprises ₹2,500 crore of fresh capital and ₹10,000 crore through an offer for sale, which will reduce HDFC Bank's stake from 94.32% to 74.19%.Operating across three verticals—Enterprise Lending, Asset Finance, and Consumer Finance—HDB Financial leverages its parent's vast customer franchise while maintaining a AAA credit rating that provides access to low-cost many mega IPOs that face mixed reception, HDB Financial has garnered unanimous support from major brokerages, though with measured expectations."The company is backed by strong parentage, brand, governance, risk management and a high credit rating," states SBI Securities, recommending subscription while expecting modest 5-10% listing gains. "It is one of the largest NBFCs catering to the 2nd largest customer franchise."Anand Rathi emphasizes the differentiation factor: "Backed by the strong parentage of HDFC Bank, India's second-largest private bank by total assets, the company offers a well-diversified product portfolio with robust granularity, scale, and sound lending quality. We consider the IPO fairly valued."Centrum highlights the valuation attractiveness, noting the issue trades at "less than 3x FY26E P/ABV, which is at a steep discount to larger peers such as Bajaj Finance and Chola, discounting relatively lower return ratios and growth."However, Bajaj Broking injects a note of caution: "Near-term asset quality and margin pressures pose risks. Investors with a medium- to long-term outlook may find the issue attractive, provided the company sustains growth while improving operating efficiency and asset quality post-listing.""History suggests caution: while size attracts headlines, it often signals market saturation rather than sustainable opportunity," warns Samco Securities. "The HDB IPO may well test whether this liquidity-squeeze effect remains alive."The fundamental challenge remains unchanged. Massive IPOs create their own headwinds by absorbing enormous amounts of market liquidity, leaving insufficient capital for sustained secondary market buying. Previous mega listings from Reliance Power in 2008 to LIC in 2022 have all succumbed to this HDB Financial's timing and backing could prove different. With HDFC Bank's distribution muscle, proven risk management capabilities, and India's ongoing credit growth story providing tailwinds, the company enters the market with advantages its predecessors lacked.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Time of India
25-06-2025
- Business
- Time of India
HDB Financial IPO: Can HDFC Bank's midas touch break the mega IPO curse?
HDB Financial Services' ₹12,500 crore IPO enters the market, facing the historical challenge of mega IPOs underperforming. Despite backing from HDFC Bank and positive brokerage sentiment, concerns linger about liquidity absorption and potential asset quality pressures. The IPO, priced at ₹700-₹740, aims to reduce HDFC Bank's stake. Tired of too many ads? Remove Ads The Mega IPO Curse Strikes Deep Tired of too many ads? Remove Ads HDFC Bank's Golden Child Steps Into the Arena Brokerage Houses Rally Behind the IPO Tired of too many ads? Remove Ads The Liquidity Squeeze Test As the Rs 12,500 crore IPO of HDB Financial Services hits Dalal Street today, investors are wondering whether the charm and pedigree of HDFC Bank will be enough to break the mega IPO jinx that has haunted primary market investors in the last 2 IPOs, those raising ₹10,000 crore or more, may dazzle at the starting line, but they've left a trail of investor heartbreak behind. According to Samco Securities, the last eight such offerings have returned an average negative 9% within a month of listing. Wait six months, and the bleeding worsens to -20%. A year in, the damage deepens to -25%.Paytm, once the poster child of India's fintech revolution, has obliterated 65% of investor wealth within 12 months of its ₹18,300 crore listing in November 2021. Life Insurance Corporation, despite its government backing and ₹21,008 crore raise in May 2022, has delivered a punishing 35% loss to shareholders who held for a more recent entrants haven't escaped the curse. Hyundai Motor's ₹27,870 crore IPO in October 2024, the largest in Indian history, has already slipped 7% in six months, while Swiggy's ₹11,327 crore listing showed early promise with 17% gains in the first month, only to surrender 30% over six months."In the last 25 years, India's mega-IPOs have often arrived at moments of peak market optimism, but with surprisingly poor follow-through," notes Samco Securities. "The pattern reflects a liquidity vacuum—massive IPOs absorb market capital, leaving little dry powder for secondary buying."Only SBI Cards stands as a rare exception, delivering 50% returns after 12 months from its ₹10,355 crore March 2020 listing, a performance achieved during an unprecedented pandemic-driven market Financial Services comes armed with impressive credentials that distinguish it from previous mega IPO failures. As the 7th largest diversified retail-focused NBFC in India with a gross loan book of ₹902.2 billion as of March 2024, the company benefits from the unassailable brand power of HDFC Bank, India's second-largest private IPO, priced between ₹700-₹740 per share, implies a valuation of approximately ₹61,000 crore at the upper end. The offering comprises ₹2,500 crore of fresh capital and ₹10,000 crore through an offer for sale, which will reduce HDFC Bank's stake from 94.32% to 74.19%.Operating across three verticals—Enterprise Lending, Asset Finance, and Consumer Finance—HDB Financial leverages its parent's vast customer franchise while maintaining a AAA credit rating that provides access to low-cost many mega IPOs that face mixed reception, HDB Financial has garnered unanimous support from major brokerages, though with measured expectations."The company is backed by strong parentage, brand, governance, risk management and a high credit rating," states SBI Securities, recommending subscription while expecting modest 5-10% listing gains. "It is one of the largest NBFCs catering to the 2nd largest customer franchise."Anand Rathi emphasizes the differentiation factor: "Backed by the strong parentage of HDFC Bank, India's second-largest private bank by total assets, the company offers a well-diversified product portfolio with robust granularity, scale, and sound lending quality. We consider the IPO fairly valued."Centrum highlights the valuation attractiveness, noting the issue trades at "less than 3x FY26E P/ABV, which is at a steep discount to larger peers such as Bajaj Finance and Chola, discounting relatively lower return ratios and growth."However, Bajaj Broking injects a note of caution: "Near-term asset quality and margin pressures pose risks. Investors with a medium- to long-term outlook may find the issue attractive, provided the company sustains growth while improving operating efficiency and asset quality post-listing.""History suggests caution: while size attracts headlines, it often signals market saturation rather than sustainable opportunity," warns Samco Securities. "The HDB IPO may well test whether this liquidity-squeeze effect remains alive."The fundamental challenge remains unchanged. Massive IPOs create their own headwinds by absorbing enormous amounts of market liquidity, leaving insufficient capital for sustained secondary market buying. Previous mega listings from Reliance Power in 2008 to LIC in 2022 have all succumbed to this HDB Financial's timing and backing could prove different. With HDFC Bank's distribution muscle, proven risk management capabilities, and India's ongoing credit growth story providing tailwinds, the company enters the market with advantages its predecessors lacked.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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Business Standard
22-06-2025
- Business
- Business Standard
Street Signs: Nifty's new conquest, SME bankers under regulatory scalpel
Samie Modak Khushboo Tiwari Mumbai Listen to This Article The 25K wall falls:Nifty's new conquest The Nifty 50 index broke new ground, closing 'decisively' above the 25,000 mark for the first time since September 2024. Market observers interpret this as a bullish signal, potentially paving the way for the index to reach record highs. Devarsh Vakil, head of prime research at HDFC Securities, noted that Nifty's breakout above 25,000 marks a positive short term trend. Immediate resistance is at 25,222, while support has shifted to 24,900. Dhupesh Dhameja, derivatives research analyst at Samco Securities, added that a firm close above 25,250 could boost upward momentum, targeting 25,500. Unless the
Time of India
10-06-2025
- Business
- Time of India
Gold vs Silver: Why silver may outperform gold soon; precious metal prices surge, record-breaking rally likely
Silver shows signs of a technical breakthrough, experts say. (AI image) Gold vs silver: Silver prices have reached a significant milestone, surpassing $36 per ounce in international markets, marking their highest level in 13 years during the previous week. Market analysts anticipate the precious metal to align with gold's performance, supported by favourable technical indicators and increased demand driven by a weakening dollar. 2025 has seen international gold prices rising by 43.7%, driven by increased demand for secure investments amidst Donald Trump's tariff policies and global political tensions. Silver has increased by 22.3%. In contrast, the Nifty 50 has risen by 5.7%, whilst Nifty Midcap 150 has grown by 3.6%, and the Smallcap 250 index has decreased by 1.3%. Historical data from Samco Securities quoted in an ET report shows silver's characteristic rapid price movements. Since 2005, in 17 instances of reaching new highs, the metal has delivered average returns of 5.2%, 13.3%, and 26.1% over three-month, six-month, and one-year periods, respectively. Silver Prices Historically Silver shows signs of a technical breakthrough, experts say. Apurva Sheth of Samco Securities notes the presence of a distinctive 'Cup and Handle' pattern visible on both weekly and yearly charts. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Seniors Born 1939-1969 Receive 11 Benefits This Month If They Ask Super Saving Online Undo "This technical formation is often a precursor to explosive breakouts. What makes this instance remarkable is its repetition across timeframes, hinting at deep market structure alignment," said Sheth. On Monday, silver traded at $36.3 per ounce, showing a 0.9% increase in international markets. The metal was valued at ₹1,05,520 per kilogram on MCX in India. "With gold likely to consolidate after a strong run, silver has the potential to outperform," said Ritesh Jain, founder, Pinetree Macro. "If silver holds above $36, it could retest the $50 highs seen during the Hunt Brothers era by the end of this year." Also Read | Gold price rise impact: Value of RBI's gold surges 57% to Rs 4.32 lakh crore Trading opportunities in silver are available through various instruments including Silver Exchange-traded Funds, Silver Fund of Funds, or Silver futures trading on MCX. According to Ramesh Varakhedkar of ICICI Securities, several factors support the anticipated silver rally, including a weakening US dollar, improving US-China trade relations, and the European Central Bank's seventh successive rate reduction. Varakhedkar emphasises silver's importance as both a financial instrument and industrial commodity in the current market scenario. The gold to silver ratio, indicating the number of silver ounces needed to purchase one ounce of gold, reached 91.3 on Monday, marking its lowest point since April 2, noted Varakhedkar. This metric suggests silver presents better value currently. The ratio had previously peaked at 126.55 in March 2020, after which silver prices doubled by August. "In the short-term, silver could rise further to around $37.2, and on the MCX, Silver July contract, short-term price range is expected between ₹102,400 and ₹108,200 per kilogram, provided it maintains above ₹102,400 (currently at ₹1,05,520)," said Varakhedkar. Also Read | Gold vs Nifty 50: Yellow metal emerges as best performing asset in FY25, but Indian equities outperform in long-term Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Mint
15-05-2025
- Business
- Mint
After a glittery rally, gold may be about to make way for stocks
'However, gold prices still have room for improvement with eventual (US) rate cuts on the horizon and continuous central bank buying. Till then, gold can find a key support at the $3080 per ounce level," she said. But gold's geopolitical risk premium is beginning to fade as the ongoing US-China trade negotiations have shown significant progress, noted Apurva Sheth, head of market perspectives and research at Samco Securities. Also read: Early birds report of a steady yet muted Q4 Last week, the US agreed to cut duties on Chinese exports to 30% from 145% for 90 days, while China reduced its tariffs on US goods to 10% from 125% for the same period, signalling an intent to de-escalate and move towards a structured trade agreement. 'This has reduced the need for investors to seek shelter in traditional safe-haven assets like gold," Seth added. In fact, during the latest Mint quarterly market survey, Jay Kothari, lead equity strategist at DSP Mutual Fund, noted that the best way to play gold from hereon is through gold-related equities. Uncertainty's gold Uncertainty defined FY25, marked by shifting policies and global tensions. Gold capitalized on this instability, outshining other asset classes. To be sure, gold returned around 27% in 2024, outperforming every other asset class and marking its ninth consecutive annual gain last year. A couple of ongoing wars, relentless central bank buying – for diversifying reserves and reducing reliance on the US dollar – and a weakening global outlook drew investors to gold, as they faced a spate of uncertainties in the near term. US president Donald Trump's tariff tantrums and the recent rout in the US currency and treasury market further increased the appeal for gold as the only reliable safe haven asset, further fuelling its rally in 2025. Indian investors appear to taking a U-turn from safe haven gold to riskier assets like equities, as green shoots of geopolitical stability begin to emerge across the globe. With the precious metal already delivering returns as high as 25% in the first four months of 2025, experts believe there is limited room for significant upside, especially as global uncertainties begin to wane. This likely explains why domestic gold exchange traded fund (ETF) redemptions reached a one-year high last month. Also read: Banks' Q4 earnings hit an 8-quarter high. But that's not driven by loans Moreover, gold has remained under pressure lately, with prices being very volatile in the last three to four weeks. Going forward, Kaynat Chainwala, associate vice-president of commodity research at Kotak Securities, anticipates a 7-8% correction in gold prices in the short term, driven by easing US-China trade tensions. In India, gold prices touched an all-time high of ₹100,000 per 10g in the retail market last month. The surge in demand for the yellow metal reached a 15-year high in 2024, fuelling its meteoric price rise. Gold demand in the country reached 4,974 tonnes in 2024, mainly driven by jewellery and investment demand, which accounted for 40% and 24% of total gold demand respectively, according to the latest NSE Market Pulse report. Also read: What the market crystal ball sees for the next 3 months While total demand rose 0.6% on a year-on-year basis, albeit on a high base, demand for gold investment rose the highest at almost 25% during the same period. Equities turn? But how long will this heightened investment demand for gold endure? A recent Motilal Oswal Financial Services report highlighted that with domestic equities underperforming, the gold price to Nifty-50 index ratio has already breached its historical median and is now nearing its FY16 peak of 4.2x. Historically, such levels have suggested a higher probability of equities outperforming gold in the future. Could a sustained recovery in equities alter this dynamic? In fact, even though gold has outperformed domestic equities in a one to three-year timeframe, from a very long-term perspective, equites have historically delivered superior returns. Hence, experts are advising caution in investing in gold going forward. 'Investors should invest in a staggered manner as and when gold (prices) falls from here on, instead of going all in. While existing uncertainty around US's trade deals will support gold prices for the next few months, we are expecting a consolidation phase in the near term," said Pranav Mer, vice-president of the equity broking group's commodity and currency research team at JM Financial Services. MCX Gold is likely to consolidate in a range of ₹91,542 to ₹93,034, which is at a 50-62% retracement level of the recent rally from ₹86,710 to ₹99,358, noted Seth from Samco Securities. On booking profits, Mer from JM Financial Services suggested that investors should book profits whenever gold rallies from current levels. In fact, investors began redeeming in March, with gold ETFs seeing their first net outflows in over a year that month. In April, however, redemptions reached a one-year peak at ₹ 1,669 crore.
