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Shares of the country's largest private bank HDFC Bank set a new record today on Thursday. Amid tremendous growth in the stock market and the great demand for the IPO of the bank's subsidiary HDB Financial, shares of HDFC Bank rose nearly 1% to a new high of ₹ 1997.90 on the BSE. This is the third consecutive day when the bank's shares have seen a rise. Market experts believe that not only because of the IPO, but the positive outlook for the banking sector in the financial year 2025-26 is also fueling this rally.

HDB Financial IPO boom

HDB Financial's IPO opened for subscription on Wednesday, June 25 and today is its second day. As of 10:35 am, this IPO has been subscribed 45%. Especially the share of non-institutional investors (NII) has been filled by 95%, which shows its tremendous demand. HDFC Bank is selling a stake of ₹10,000 crore in its NBFC branch HDB Financial through an Offer for Sale (OFS). The bank is expected to get a strong return of about 1495% on its initial investment from this deal.

Market expert Avinash Goranshkar said the market is looking at the valuation of HDB Financial IPO very positively. HDFC Bank is going to get a huge amount of ₹10,000 crore from this OFS, which will be seen in the bank's account in the April-June quarter. This is the reason why the stock is seeing a rise. He further said that since last year, investors were expecting value unlocking from HDB Financial, which is now being fulfilled. This is a big positive development for the bank and investors.

Goranshkar also said that even though the amount of ₹10,000 crore may not be very big for HDFC Bank, it will further strengthen the financial strength of the bank. Apart from this, this IPO is also boosting the sentiment for the banking and NBFC sector. Both fee-based and non-fee-based income are expected to improve, which is supporting the stock's rally, he said.

HDFC Bank is a big player in the NBFC space
HDFC Bank's controlling stake in HDB Financial is also a big factor. According to Goranshkar, HDB Financial's transformation from a private company to a publicly listed company will increase its market cap, which will benefit HDFC Bank. Earlier, HDB's value was not fully reflected in the bank's accounts, but now this is going to change.

Along with this, the recent interest rate cut by the Reserve Bank of India (RBI) and the supportive regulatory environment for the NBFC sector have also made the outlook more bullish for FY26. Goranshkar said HDFC Bank is a big player in the NBFC space. RBI's new rules and softening of interest rates will benefit the NBFC sector, the effect of which is also visible on the shares of HDFC Bank.

Expectation of a boom in the banking sector
Another reason for the rise in HDFC Bank shares is the positive outlook of the banking sector. Goranshkar said, the banking sector is going to perform well in the financial year 2025-26. Even though there has been some decline in trade growth, heavy investment in infrastructure is expected from the government and the private sector. This will increase the demand for funding for banks, which will benefit big players like HDFC Bank.

According to a recent report by SBI Securities (May 29), the banking system is in a strong position. Adequate liquidity, possible relaxation in LCR norms, and historically low NPAs (non-performing assets) will help maintain the profitability of banks. The report said that banks with strong deposit base and fast balance sheet growth will perform better in the changing interest rate environment and can earn record profits in FY26.

Should investors invest?
This rise in HDFC Bank shares has caught the attention of investors. Market experts are considering it a good opportunity considering the success of HDB Financial IPO and positive sentiment for the banking sector. However, it is important to consult certified financial experts before investing.

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