HDB Financial IPO shocker: Price band 42% below unlisted market value

In a move that has caught investors off guard, HDB Financial Services on Friday set the price band for its upcoming initial public offering at Rs 700–740 per share, marking a steep 42% discount to its current valuation in the unlisted market. At the upper end of the price band, the non-banking financial company’s market capitalisation would stand at approximately Rs 58,889 crore.

The pricing has sparked widespread disbelief, particularly among those active in the grey market, where HDB Financial shares had been trading at about Rs 1,275 earlier this month. According to UnlistedZone, this represents a 17% fall from the stock’s peak of Rs 1,550 in September 2024.

Wider pattern emerges

HDB Financial is not alone in setting its IPO price below prevailing grey market expectations. Tata Technologies, AGS Transact, UTI Asset Management Co Ltd, and PB Fintech have all previously followed similar pricing strategies, choosing valuations well below what unlisted market participants had anticipated.

Market watchers note that the widening gap between grey market valuations and IPO pricing is becoming more common and may not be an exception. They caution that the unlisted market tends to be highly volatile and risk-prone, and warn investors against entering this space solely driven by IPO excitement without conducting proper due diligence.

Market participants suggest that the unlisted market is best approached as a long-term play, ideally two to three years before a company goes public, when valuations are still relatively attractive. They point out that if there’s little or no discount to the expected IPO price, the investment’s appeal and upside potential are significantly reduced.

Sharp rally in other unlisted stocks

The National Stock Exchange (NSE) and Tata Capital have both witnessed sharp run-ups in the unlisted market. Shares of NSE have rallied over 50% in the last month and are currently trading at around Rs 2,350, bringing year-to-date gains to more than 300%. Tata Capital’s unlisted stock has surged more than 50% since the start of 2025 and is currently priced near Rs 1,035, per UnlistedZone.

Key dates for HDB IPO

HDB Financial’s Rs 12,500 crore IPO will open for public subscription on June 25 and close on June 27. The anchor book will open a day earlier, on June 24. The basis of allotment is expected to be finalised on June 30, while refunds and share credit are scheduled for July 1. The stock is slated to list on the exchanges on July 2.
Also read | HDFC Bank shares in focus as Rs 12,500-crore HDB Financial IPO opens next week

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