India’s IPO market is gaining momentum after a slow start, as the stock market stabilizes following earlier volatility driven by global trade concerns.
The blue-chip Nifty 50 index, which hit a one-year low in April, now sits just 2.4% below record highs from last year, as easing geopolitical tensions and trade fears spurred risk-on sentiment.
HDB Financial, a unit of India’s biggest private lender HDFC Bank, saw its issue subscribed 16.7 times over, driven by qualified institutional buyers such as foreign investors and mutual funds who bid for 55 times their reserved portion.
Non-institutional investors bid for 10 times their portion, while retail investor interest was comparatively muted, with their shares being oversubscribed just 1.4 times, exchange data showed.
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The strong investor response makes HDB Financial’s IPO the most subscribed offering over $1 billion since Zomato’s in 2021, data from Prime Database showed. “The response to the issue has been very encouraging, and considering the issue size signals that investors are growing increasingly confident of the local market as global trade worries ebb out,” said Narendra Solanki, head of research at Anand Rathi Shares and Stock Brokers. “The bid numbers show that the primary markets are coming back to life after a lull earlier this year, and such a response for a sizeable issue like HDB’s should give IPO hopefuls in the pipeline confidence to also come forth to test waters,” Solanki added.
HDB Financial’ s IPO, the biggest ever by an Indian non-bank lender, was one of six offerings this week, five of which were oversubscribed in a range of 2-86 times. Earlier this week, Credila Financial Services and Pine Labs filed for IPOs.
HDFC Bank, which holds a 94% stake in HDB, sold shares worth up to 100 billion rupees, while HDB issued new shares worth 25 billion rupees. The company is targeting a valuation of up to $7.1 billion at the upper end of the 700-740 rupees price band.
The stock is expected to start trading on July 2.
HDB had already raised $392 million from anchor investors, including BlackRock funds, Life Insurance Corporation of India (LIC) and Norway’s sovereign wealth fund.
