Several media reports say that HDFC Bank is planning to sell its stake in HDB Financial Services to raise about Rs 100 billion ($1.4 billion). As of 31 March, the country's biggest lender in market value, held 95.53 percent stake in the financial services company.
A Livemint report citing sources said that the HDFC Bank has been meeting various investment banks to discuss plans on listing the NBFC (non-banking finance company). It is likely to raise around Rs 7,000 to 8,000 crore through an IPO (initial public offering) that is expected to be a mix of primary and secondary share sale.
Further, Bloomberg reported that HDFC Bank had appointed Bank of America, Merrill Lynch and Morgan Stanley to manage the IPO, which may take place by the end of this year.
The listing comes at a time when NBFCs are facing a liquidity crunch following the defaults in debt payments by the Infrastructure Leasing and Financial Services (IL&FS) group in September 2018. Non-banking lenders have been looking at disinvestment in assets in an effort to seek alternative sources of capital.
Recently, DHFL (Dewan Housing Finance Ltd) sold some of its subsidiaries including its affordable home finance arm Aadhar Housing Finance.