HDFC Bk shelves HDB’s IPO plans

Mumbai: HDFC Bank has decided to shelve IPO plans of its subsidiary HDB Financial Services. The NBFC arm will focus on further improving its technology platform. The bank will consider testing the market for price discovery through a small stake sale.
Last year, Aditya Puri, the bank’s founding and then MD & CEO had indicated that an IPO of the HDB was on the agenda. However, under the leadership of Puri’s successor Sashidhar Jagdishan, there is a rethink on going public for now.In a recent analyst call, CFO Srinivasan Vaidyanathan had said several international and domestic investors had shown interest in the growth plans of the company and added that the bank may test the market in terms of price discovery. “We do need to see Covid behind and the growth momentum starting to pick up, then we’ll have an evaluation,” said Srinivasan.
Speaking to TOI, HDB Financial Services MD & CEO G Ramesh said the company caters to three types of customers: Those who are digitally savvy, those who require assistance with digital and those requiring high engagement. He said that while the company would continue to be an omnichannel provider as far as customers are concerned, at the company end, there is a high level of digitisation to enable small-ticket loans in a straight-through manner, based on scorecards without any paperwork.
For digitally savvy customers, the bank has been offering an EMI card in partnership with Obopay. “For someone who has borrowed for a commercial vehicle, we can still accept repayments in cash. But the collection data is instantly entered into a tablet and I can get data on the exact location where we have collected cash from each borrower,” said Ramesh.
“We have a presence in 1,000 cities and can cater to customers who require a high level of engagement. We also have products for digitally savvy customers and are growing in consumer durable financing, where we have the capability of instant approval,” said Ramesh.
The company’s loan book had witnessed stress in the first quarter of the current fiscal due to the pandemic but is already seeing a bounceback in collections. “There was a tendency to hold back from fear that money may be needed for medical emergencies. We were empathetic and did not pursue recoveries during this period,” said Ramesh.