HDFC Bank-promoted HDB Financial Services Ltd (HDBF) has launched the year’s biggest IPO, sized at about Rs12,500 crore. HDBF began its journey in 2007 as a subsidiary of HDFC Bank, the largest private sector bank in India in terms of total assets (Rs39,10,200 crore, as on 31 March 2025, with businesses (including those of its subsidiaries) spanning retail and commercial banking, asset management, life insurance, general insurance and broking.
Today, HDBF is India’s second largest and third fastest-growing customer franchise amongst NBFC peers (for which data is available), according to the CRISIL Report. And, it served 19.2 million customers as of 31 March 2025, which grew at a CAGR of 25.45 per cent between 31 March 2023 and 31 March 2025. It primarily caters to underserved and underbanked customers in low to middle-income households with minimal or no credit history. As on 31 March 2025, over 80 per cent of its branches are located outside India’s 20 largest cities by population (based on the 2011 census report) and over 70 per cent are located in Tier IV+ towns. It established a pan-India network of 1,771 branches in 1,170 towns and cities across 31 states and Union Territories.
Its customers mainly comprise salaried and self-employed individuals, as well as business owners and entrepreneurs. It aims to meet the demands of our various customer categories with diversified product offerings, strong geographical presence across India, technology backed rapid turnaround times and strong customer service. Its focus has remained on building a highly granular loan book with 20 largest customers, accounting for less than 0.34 per cent of total gross loans; its aggregated average ticket size stood at about Rs1,65,000; and secured loans represented 73.01 per cent of total gross loans and unsecured loans represented 26.99 per cent of total gross loans (all figures as on 31 March 2025).
“Our customer is our hero!” exults Ramesh Ganeshan, MD & CEO, HDBF. “We are a diversified NBFC, with a goal of having an optimal mix across products, while maintaining a balanced approach to secured and unsecured loans in our loan book. We believe that our strategy of portfolio diversification across both products and geographies creates a strong and sustainable franchise”.
Track record
HDBF has demonstrated a track record of product innovation, having piloted multiple new products across our three business verticals. These products have gone on to scale up and achieve profitability after being introduced on a wider scale.
We believe that our strategy of portfolio diversification across both products and geographies creates a strong and sustainable franchise
For one, HDBF introduced the product, enterprise business loan, in our enterprise lending vertical, as a variant of the LAP product in 2014. It was able to identify customers seeking business loans with a strong repayment ability but with collateral that would typically be outside municipal limits, as opposed to LAP. HDBF has been able to underwrite such customers and provide them with a variant of secured loan product with an attractive pricing model, given the nature of the underlying collateral. It has been able to upsell other business loans to such customers after they had established a strong track record of repayment.
Also, it has provided pre-approved loan limits to existing high-quality customers to increase conversion or to apply for unsecured loans. Such customers can obtain new loans directly in a very short timeframe through digital channels such as through the DIY journey platforms.
“This has created an opportunity for us, and we have now created a dedicated distribution network for sourcing such customers through our dedicated FOS and have been able to demonstrate strong traction of selling personal lending products to them,” adds Ramesh Ganeshan.
HDBF has a highly granular retail loan book, bolstered by a large and rapidly growing customer base with a focus on serving the underbanked customer segments. It has a large, diversified and seasoned product portfolio with a sustainable track record of diversification, growth and profitability through the cycles. Its tailored sourcing is supported by an omni-channel and digitally powered pan-India distribution network. It has comprehensive systems and processes contributing to robust credit underwriting and strong collections. It has advanced technology tools driving enhanced customer experience and efficiency across each stage of the customer lifecycle.
HDBF intends to diversify and expand addressable customer segments by widening and enhancing product offering. It seeks to continue to expand pan-India omni-channel distribution network. It will continue to invest in technology, data analytics and artificial intelligence to further improve customer experience, increase organisational productivity and decrease costs. It will continue to diversify the borrowing profile to optimise borrowings costs. It will further strengthen and improve robust risk management framework as well as underwriting and collections capabilities to minimise the risk of credit losses. It will continue to attract, upskill and retain talented employees by strengthening organizational culture.