HDFC Bank shares surged to an all-time high of ₹1997.90 on June 26, buoyed by robust investor demand for the HDB Financial IPO and optimism surrounding the banking sector’s performance in FY2025–26. Analysts suggest that the value unlocking from HDB Financial’s listing and a strong fiscal outlook are key drivers behind the rally.
HDB Financial IPO Spurs Investor Confidence
India’s largest private lender saw its stock rise nearly 1%, extending a three-day gaining streak. This rally coincides with the ongoing IPO of HDFC Bank’s non-banking finance arm, HDB Financial Services, which opened for subscription on June 25.
As of 10:35 AM on June 26, the IPO had garnered a healthy 45% subscription overall, with the non-institutional investor category already at 95% subscription. HDFC Bank is expected to raise around ₹10,000 crore by offloading its stake in HDB Financial via an Offer for Sale (OFS).
“The market seems to view the HDB Financial IPO’s valuation quite favourably,” said market analyst Avinash Goranshkar. “This one-time gain will likely reflect in the April–June quarter, and that’s one reason the stock is up.”
Strategic Value Unlocking and Retained Control
This IPO marks a long-awaited value unlocking from HDB Financial, which analysts and investors had been anticipating since last year. Although ₹10,000 crore may be a small fraction of HDFC Bank’s overall balance sheet, the listing changes the narrative around the bank’s long-term potential.
“HDFC Bank retaining control of HDB Financial means it will now benefit from the market cap uplift that wasn’t reflected earlier,” Goranshkar explained.
The bank’s early investment in HDB has yielded an impressive 1495% return, highlighting the value of the subsidiary now becoming visible in the public domain.
Broader Sectoral Strength in FY26
Beyond HDB Financial’s IPO, HDFC Bank’s share price also reflects growing optimism about the Indian banking sector. With expectations of strong infrastructure investment from both government and private entities, banks are projected to benefit from increased credit demand.
“We are likely to see significant infrastructure investment… This will increase the overall demand for funding from banks,” said Goranshkar.
Recent regulatory measures, including RBI’s interest rate adjustments, have also improved the outlook for non-banking financial companies (NBFCs), further strengthening HDFC Bank’s position given its presence in both banking and NBFC domains.
Conclusion:
The rally in HDFC Bank’s share price underscores investor enthusiasm not just for HDB Financial’s IPO but also for the bank’s strategic positioning and the broader sectoral upswing. With value unlocking, regulatory tailwinds, and credit growth on the horizon, the banking sector—led by giants like HDFC Bank—appears set for a strong FY2025–26.
