HDB Financial Services, the non-banking finance arm of HDFC Bank, will make its stock market debut on Wednesday with grey market activity indicating a strong listing. According to ET, the grey market premium (GMP) stood at Rs 67 as of Tuesday, suggesting a listing price of Rs 807, about 9% higher than the IPO’s upper price band of Rs 740.The Rs 12,500 crore public issue, which included a Rs 2,500 crore fresh issue and a Rs 10,000 crore offer-for-sale, was subscribed 16.69 times. Qualified Institutional Buyers (QIBs) led the subscription, with their portion oversubscribed 55.47 times. However, retail investors remained cautious, with their quota subscribed only 1.41 times, the report said.“Institutional investors recognize HDB’s structural advantage as a diversified, RBI upper-layer NBFC with HDFC Bank’s distribution muscle,” said Tarun Singh, MD and Founder of Highbrow Securities. “The 55x QIB bid reflects confidence in its ‘phygital’ presence across Tier 2–4 cities and a 23% loan book CAGR, whereas retail caution mirrors the post-LIC and Paytm skepticism toward large issuances.”Data from Investorgain.com quoted in the report, shows the GMP trend has risen steadily over 19 sessions, peaking at Rs 104.50, signalling bullish sentiment. The IPO’s price band of Rs 700–740 translates to a post-issue price-to-book value of 3.5 times.Mirae Asset Capital Markets noted, “HDB Financial is the second-largest NBFC. It primarily caters to underserved and unbanked customers in low- to middle-income households with minimal to no credit history. The issue seems to be fully priced given the business’s fundamentals and ROE of around 15%. However, the company may benefit from the strong HDFC brand going forward.”Singh added, “Retail finds HDB’s valuation lukewarm compared to Bajaj Finance’s 5.9x, compounded by HDFC Bank stake-sale fatigue and memories of recent IPO letdowns.”Still, Mirae noted HDB has delivered strong financials, including 24% CAGR in AUM over FY23–FY25, a 2.2% return on assets, and a 14.7% return on equity in FY25. Gross NPAs stood at 2.26%.“A 10–15% pop is likely given QIB hunger,” Singh predicted, “potentially reviving retail interest if HDB delivers on its 15%+ AUM growth guidance in FY25.” He added the IPO could become a bellwether for future NBFC listings and validates the RBI’s push to list large NBFCs.