HDB Financial & Tata Capital: The Biggest IPOs to Watch in June 2025: Are you looking to diversify your investment portfolio with high-potential opportunities in 2025? The Indian stock market is buzzing with excitement as HDB Financial & Tata Capital, two financial giants, prepare to launch what could be the biggest IPOs to watch in June 2025. With a combined issue size potentially exceeding ₹29,700 crore ($3.5 billion), these initial public offerings (IPOs) are set to reshape the non-banking financial company (NBFC) landscape and offer investors a chance to tap into India’s booming financial sector. This article dives deep into the details of these IPOs, their significance, and how you can prepare to make informed investment decisions. From financials to risks, we’ve got you covered with expert insights and actionable tips.

The Rise of NBFC IPOs in India

Why NBFCs Are Dominating the IPO Market in 2025

India’s IPO market is experiencing a resurgence in 2025, driven by favorable market conditions and regulatory tailwinds. Non-banking financial companies like HDB Financial & Tata Capital are at the forefront, capitalizing on the Reserve Bank of India’s (RBI) mandate for upper-layer NBFCs to list by September 2025. These IPOs are not just about raising capital; they’re strategic moves to unlock shareholder value, strengthen capital bases, and fuel growth in underserved markets.

• Market Context: After a record-breaking 2024 with Hyundai Motor India’s $3.3 billion IPO, 2025 is seeing a steady rise in high-profile listings. The Nifty 50’s rebound from a one-year low signals robust investor confidence.
• NBFC Appeal: NBFCs cater to credit-thin and underbanked segments, offering diversified loan portfolios and stable growth, making them attractive to retail and institutional investors alike.

HDB Financial Services: A Powerhouse in Retail Lending

Overview of HDB Financial Services

HDB Financial Services, a subsidiary of HDFC Bank, is poised to launch a ₹12,500 crore IPO, the largest NBFC offering in India to date. Established in 2007, HDB focuses on retail, enterprise, and asset financing, serving over 17.5 million customers across 1,772 branches in 1,162 towns as of September 2024. Its diversified loan book and strong parentage make it a standout in the NBFC space.

• IPO Details:
  • Issue Size: ₹12,500 crore (₹2,500 crore fresh issue + ₹10,000 crore offer for sale by HDFC Bank).
  • Price Band: ₹700–₹740 per share.
  • Subscription Dates: June 25–27, 2025.
  • Listing Date: July 2, 2025, on BSE and NSE.
  • Valuation: At the upper price band, HDB is valued at ₹61,388 crore, with a price-to-book (P/B) ratio of 3.7x.
  • Use of Proceeds: Strengthen Tier-I capital base for onward lending in enterprise, asset, and consumer finance segments.
• Financial Snapshot:
  • Assets Under Management (AUM): ₹1,072.6 billion (23.71% CAGR from FY23–FY25).
  • Loan Book: ₹1,068.8 billion (23.54% CAGR).
  • Revenue: ₹16,300.28 crore in FY25, up 15% from FY24.
  • Net Profit: ₹2,175.92 crore in FY25, down 11.6% due to increased provisions.
• Strengths:
  • Backed by HDFC Bank, India’s second-largest private bank.
  • Diversified loan portfolio with low concentration risk (top 20 borrowers <0.36% of loans).
  • Strong rural and semi-urban presence, targeting underbanked customers.
• Risks:
  • High cost-to-income ratio (42%) due to extensive distribution network.
  • 27% exposure to unsecured loans, mitigated by data-driven underwriting.
  • Potential regulatory changes from RBI’s October 2024 draft guidelines, which may limit overlapping services with HDFC Bank.

Why Investors Are Excited

HDB’s IPO has already garnered significant interest, with ₹3,369 crore raised from anchor investors, including LIC, ICICI Prudential, and Goldman Sachs. The grey market premium (GMP) of ₹65–₹103 suggests an 8–12% listing gain. Brokerages like Anand Rathi and Mirae Asset recommend a “SUBSCRIBE” rating, citing HDB’s robust growth and fair valuation compared to peers like Cholamandalam (P/B 5.5x) and Bajaj Finance (P/B 5.8x).

Case Study: Bajaj Housing Finance’s ₹3 lakh crore bid in 2024 set a high bar for NBFC IPOs. HDB’s 16.69x subscription on its final day (217.66 crore shares bid vs. 13.04 crore offered) indicates similar investor enthusiasm, driven by its strong brand and diversified portfolio.

Tata Capital: A Titan in the Making

Overview of Tata Capital

Tata Capital, wholly owned by Tata Sons, is gearing up for a ₹17,200 crore ($2 billion) IPO, potentially the largest of 2025. As a leading NBFC-ICC (Investment and Credit Company), Tata Capital offers a wide range of financial services, including retail, corporate, infrastructure, and wealth management lending. Its IPO is a strategic move to comply with RBI’s listing mandate while unlocking value for the Tata Group.

• IPO Details:
  • Issue Size: ₹17,200 crore (230 million fresh shares + offer for sale by Tata Sons).
  • Expected Timing: Early to mid-July 2025.
  • Valuation: Targeting up to $11 billion, per Bloomberg reports.
  • Use of Proceeds: Augment capital base for lending across retail, SME, and infrastructure segments.
• Financial Snapshot:
  • Assets Under Management: Over ₹1.5 lakh crore as of March 2025.
  • Loan Portfolio: Spans home loans, vehicle loans, personal loans, and corporate financing.
  • Growth Drivers: Strong retail book and infrastructure finance tied to government capex projects.
• Strengths:
  • Part of the Tata Group, known for trust and operational excellence.
  • Comprehensive service offerings, from personal loans to wealth management.
  • SEBI approval received on June 21, 2025, signaling a smooth path to listing.
• Risks:
  • High valuation expectations may deter value-conscious investors.
  • Competition from established NBFCs like Bajaj Finance and HDB Financial.
  • Potential dilution of Tata Sons’ 93% stake post-IPO.

Why Investors Are Watching Closely

Tata Capital’s IPO is generating buzz due to its massive scale and the Tata Group’s reputation. With a valuation of $11 billion, it surpasses HDB Financial’s offering and positions Tata Capital as a leader in India’s NBFC sector. The IPO’s timing aligns with a buoyant market, with the Nifty 50 nearing record highs, making it a prime opportunity for investors seeking long-term growth.

Case Study: Tata Technologies’ ₹1.56 lakh crore bid in 2023 highlighted the market’s appetite for Tata Group IPOs. Tata Capital’s broader financial services portfolio and regulatory compliance make it a compelling bet for institutional and retail investors.

Comparing HDB Financial & Tata Capital IPOs

Why These IPOs Matter for Investors

Regulatory Push and Market Opportunities

The RBI’s 2022 mandate for upper-layer NBFCs to list by September 2025 is a key driver for both HDB Financial & Tata Capital. This regulation ensures compliance while enhancing transparency and investor access to high-growth NBFCs. India’s underbanked population and rising credit demand (especially in rural and semi-urban areas) position these companies to capture significant market share.

Investor Sentiment and Market Trends

• Retail Investor Appeal: HDB’s low minimum lot size (20 shares, ₹14,800) and Tata Capital’s trusted brand make these IPOs accessible to retail investors.
• Institutional Interest: Anchor investors like LIC and Morgan Stanley in HDB’s IPO signal strong institutional confidence, likely mirrored in Tata Capital’s offering.
• Market Recovery: The Nifty 50’s 2.4% proximity to record highs and easing geopolitical tensions (e.g., Iran-Israel ceasefire) create a favorable environment for IPOs.

Risks to Consider

• Regulatory Risks: RBI’s October 2024 draft guidelines may force banks like HDFC to reduce NBFC stakes, impacting HDB’s operations.
• Valuation Concerns: HDB’s 3.7x P/B is fair but lower than peers like Bajaj Finance (5.8x). Tata Capital’s $11 billion valuation may face scrutiny if market sentiment shifts.
• Economic Volatility: Global trade concerns and interest rate fluctuations could affect NBFC profitability.

How to Prepare for These IPOs

Step-by-Step Guide to Applying

1. Open a Demat Account: Use platforms like Zerodha or HDFC Sky for seamless IPO applications.
2. Check Eligibility: HDB offers shareholder and employee quotas (₹1,250 crore and ₹200 crore, respectively). Verify eligibility by June 19, 2025, for HDB’s shareholder quota.
3. Understand Lot Sizes:
   • HDB: Minimum 20 shares (₹14,800); sNII: 14 lots (₹2,07,200); bNII: 68 lots (₹10,06,400).
   • Tata Capital: Details TBD, but expect similar retail-friendly lot sizes.
4. Use UPI for Payment: Approve mandates via UPI apps for quick processing.
5. Monitor GMP: Track grey market premiums to gauge listing day expectations.

Expert Tips for Investors

• Long-Term Perspective: Analysts recommend holding HDB and Tata Capital shares for 5–10 years due to their strong fundamentals and market positioning.
• Diversify Your Portfolio: Balance NBFC investments with other sectors to mitigate risks.
• Consult a Financial Advisor: Given regulatory uncertainties, seek expert advice before investing.

Internal Links:

1. HDB Financial & Tata Capital.
2. Follow Fundmetry.com for more financial updates.

FAQ Section

1. What Makes HDB Financial Services IPO a Good Investment?

HDB Financial Services’ IPO is attractive due to its strong parentage (HDFC Bank), diversified loan portfolio, and focus on underbanked segments. With a ₹12,500 crore issue, it’s the largest NBFC IPO in India, offering a fresh issue of ₹2,500 crore to bolster its Tier-I capital and an offer for sale of ₹10,000 crore. Its AUM grew at a 23.71% CAGR from FY23–FY25, reaching ₹1,072.6 billion, and its loan book expanded at a 23.54% CAGR. Despite a 26% profit decline in Q3 FY25 due to higher provisions, analysts like Anand Rathi and Mirae Asset recommend subscribing, citing a fair P/B ratio of 3.7x compared to peers like Bajaj Finance (5.8x). The GMP of ₹65–₹103 suggests an 8–12% listing gain, making it appealing for short-term and long-term investors. However, risks include a high cost-to-income ratio (42%) and potential RBI regulations impacting its overlap with HDFC Bank’s services.

2. Why Is Tata Capital’s IPO Considered the Biggest in 2025?

Tata Capital’s ₹17,200 crore IPO is poised to be the largest in 2025, surpassing HDB Financial’s ₹12,500 crore offering. Targeting a $11 billion valuation, it includes a fresh issue of 230 million shares and an offer for sale by Tata Sons. The IPO, expected in early July 2025, aligns with RBI’s mandate for upper-layer NBFCs to list by September 2025. Tata Capital’s AUM exceeds ₹1.5 lakh crore, with a diverse portfolio spanning retail, corporate, and infrastructure lending. Its Tata Group backing and comprehensive service offerings make it a market leader. However, high valuation expectations and competition from peers like HDB Financial pose risks. The IPO’s scale and the Tata brand’s trust factor make it a must-watch for investors seeking exposure to India’s financial sector.

3. How Can Retail Investors Apply for These IPOs?

Retail investors can apply for HDB Financial & Tata Capital IPOs through platforms like Zerodha, HDFC Sky, or Groww. For HDB, the minimum lot size is 20 shares (₹14,800 at ₹740/share), with applications accepted from June 25–27, 2025. Log into your demat account, navigate to the IPO section, select HDB Financial, enter bid details, and approve the UPI mandate. For Tata Capital, details are pending, but expect a similar process in July 2025. HDB offers a shareholder quota (₹1,250 crore) for HDFC Bank shareholders as of June 19, 2025, and an employee quota (₹200 crore). To improve allotment chances, bid at the cutoff price and monitor oversubscription trends. Always consult a SEBI-registered advisor before applying.

4. What Are the Risks of Investing in NBFC IPOs Like HDB and Tata Capital?

Investing in NBFC IPOs carries risks, including regulatory changes, valuation concerns, and market volatility. For HDB Financial, RBI’s October 2024 draft guidelines may restrict overlapping services with HDFC Bank, potentially requiring a stake reduction below 20%. Its high cost-to-income ratio (42%) and 27% unsecured loan exposure are concerns, though mitigated by strong underwriting. Tata Capital’s $11 billion valuation may seem steep compared to peers, and its IPO’s success depends on market sentiment in July 2025. Both face competition from established NBFCs like Bajaj Finance and economic risks like interest rate fluctuations. Investors should weigh these against HDB’s 23.71% AUM CAGR and Tata Capital’s diversified portfolio before deciding.

5. How Do HDB Financial and Tata Capital Compare to Other NBFC IPOs?

HDB Financial and Tata Capital stand out due to their scale and parentage. HDB’s ₹12,500 crore IPO is the largest NBFC offering, with a diversified loan book (23.54% CAGR) and a P/B of 3.7x, lower than Bajaj Finance (5.8x) and Cholamandalam (5.5x). Tata Capital’s ₹17,200 crore IPO targets a $11 billion valuation, leveraging its Tata Group backing and broad portfolio (retail, corporate, infrastructure). Compared to Hero FinCorp (₹4,000 crore IPO, AUM ₹51,820 crore) or JSW Cement (₹4,000 crore), both offer larger scale and stronger brand equity. However, their valuations and regulatory compliance needs make thorough due diligence essential.

6. What Is the Expected Listing Performance of These IPOs?

HDB Financial’s IPO saw a 16.69x subscription, with bids for 217.66 crore shares against 13.04 crore offered, driven by QIBs (55x). Its GMP of ₹65–₹103 suggests an 8–12% listing gain, with an estimated listing price of ₹805–₹843 on July 2, 2025. Tata Capital’s listing performance is speculative, but its $11 billion valuation and Tata Group backing could drive strong demand, similar to Tata Technologies’ 2023 IPO (₹1.56 lakh crore bids). Market conditions, with the Nifty 50 near record highs, support positive listing outcomes, but global trade uncertainties and high valuations could temper gains. Monitor GMP closer to Tata Capital’s IPO date for clearer insights.

Conclusion: Don’t Miss Out on These Blockbuster IPOs

HDB Financial & Tata Capital are set to dominate the biggest IPOs to watch in June 2025, offering investors a rare opportunity to invest in India’s thriving NBFC sector. HDB’s ₹12,500 crore IPO, with its strong HDFC Bank backing and diversified portfolio, and Tata Capital’s ₹17,200 crore offering, leveraging the Tata Group’s legacy, promise significant growth potential. While risks like regulatory changes and high valuations exist, the long-term outlook is promising, with both companies well-positioned to capture India’s credit demand. Stay informed, consult a financial advisor, and consider applying for these IPOs to diversify your portfolio. Share your thoughts in the comments below or sign up for our newsletter for the latest IPO updates!

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