HDFC Arm Approves ₹2,500 Crore IPO

Key Takeaways from the HDB IPO Announcement

• HDB Financial Services will raise up to ₹2,500 crore via fresh issue of shares.
• An additional offer for sale (OFS) is planned by existing shareholders.
• The IPO will also include amendments to the company’s Employee Stock Option Schemes.

As mentioned in a stock exchange filing, the company has announced plans to raise up to Rs. 2,500 crore through an equity share issuance with equity shares of face value of Rs 10 each. This will include both fresh equity shares and an offer for sale by existing shareholders, subject to shareholder approval, market conditions, regulatory clearances, and other necessary approvals.

The company will also amend its Articles of Association and amend the terms and conditions of its existing employee stock option schemes (2014, 2017, and 2022) as part of the ongoing review to ensure regulatory compliance. 

HDFC Bank holds a 94.64 percent stake in HDB Financial Services. HDB Financial was established in 2007 and currently operates over 1,680 branches throughout India, offering both secured and unsecured loans.

About HDFC Bank Limited

HDFC Bank Limited, headquartered in Mumbai, is India's largest private sector bank by assets and ranks as the world's tenth-largest bank by market capitalisation as of May 2024. With a market capitalisation of $145 billion as of April 2024, it stands as the third-largest company on Indian stock exchanges.

About HDB Financial Services

HDB Financial Services is a leading non-banking financial company that mainly serves retail and commercial customers. The company provides a range of financial products and services, including consumer loans, asset financing, secured and unsecured loans, and loans against real estate.

Key Takeaways from the IPO Announcement

• The IPO will be open from September 26 to September 30, 2024, with shares priced between ₹159 and ₹168 per share.
• Eligible employees will receive a discount of ₹8 per share on the IPO price.
• The net proceeds will be used to expand existing facilities, set up a new manufacturing plant, and fund working capital needs.

The IPO includes a fresh issue of 9,405,000 equity shares with face value of Rs 10 per share with the proceeds aimed at expanding Diffusion Engineers' manufacturing facilities, including the Khapri facility in Nagpur and a new facility in Hingna, Nagpur. Funds will also support working capital needs and other corporate purposes. 

The minimum bid lot for retail investors is 88 equity shares, with a maximum subscription amount of ₹2,00,000 for retail investors and ₹5,00,000 for eligible employees.

Eligible employees will receive a discount of ₹8 per share, and retail investors can bid for shares with a minimum order of 88 equity shares. The IPO will operate as a 100% book-building issue, with a tick size of Re.1.

Investors can bid between 10:00 a.m. and 5:00 p.m. during the issue period, and UPI mandate confirmations must be completed by 5:00 p.m. on the last day of IPO bidding, September 30, 2024. Investors are encouraged to confirm their UPI mandates well in advance to avoid last-minute technical issues.

Unistone Capital Private Limited is the lead manager for the IPO, with HDFC Bank and ICICI Bank acting as sponsor banks.

About Diffusion Engineers Limited

Diffusion Engineers Limited, founded in 1982, specialises in producing welding consumables, wear plates, parts, and heavy machinery for various core industries. The company also provides repair and reconditioning services for large machinery and equipment, while trading in wear protection powders and welding and cutting machines.

At its facilities, Diffusion Engineers uses a unique "Super Conditioning" process that enhances machine component durability, reduces wear, and extends their lifespan, resulting in lower production costs. The company operates four manufacturing units in Nagpur, Maharashtra, with three located in the Nagpur Industrial Area and one in Khapri.

Key Takeaways from Puravankara NRI Home Fest:

• The 'Purva NRI Home Fest' will take place at Shangri-La Dubai on September 28-29, 2024. It is an exclusive realty bonanza for NRIs who are planning to buy luxury homes in India.
• More than 4,000 homes in the portfolio of over 20+ ongoing and upcoming projects including luxury apartments, villas, and villa plots that could be as small as 600 sq. ft. or as large as 5,000 sq. ft. will be previewed here.
• Some of the significant projects it has in its portfolio are Purva Windermere in Chennai, Purva Clermont in Mumbai, Purva Park Hill in Bengaluru and Presidential Villas at Purva Sound of Water in Bengaluru. 
• Puravankara also extends complete post-sales support, including loan facilitation and personalised interior designing services, to its patrons through its brand Purva Streaks.
• During the fest, special deals will be available-vouchers worth a maximum of Rs 10 lakhs would be available for bookings done.

Festival attendees can view over 20 projects of key Indian cities namely Bengaluru, Chennai, Kochi, Mumbai, and Pune having over 4000 homes. With properties ranging from luxurious apartments to world-class villas, villa plots and BHK1-5, of sizes starting as small as 600 sq. ft. and going as high as 5,000 sq. ft, viewers can have a full view.

Abhishek Kapoor, Group CEO of Puravankara, said that the demand from NRIs to invest back home was ‘increasing’ and deposits received from NRIs jumped sharply by 84.4% to $11.8 billion from April 2023 to February 2024. "The Purva NRI Home Fest is the chance for them to feel our 'YOU' Philosophy, which makes the customer at the heart of everything we do," Kapoor said.

Purva Windermere in Chennai, Purva Clermont in Mumbai, and Purva Park Hill in Bengaluru are high-end projects under the brand. Another unique experience would be the Presidential Villas at Purva Sound of Water in Bengaluru. Purva Land offers villa plots under the brand with which owners can build their dream homes.

As a facilitator, the company makes sure its customers' buying experience is hassle-free through full post-sales support right from facilitating loans to interior design services specially designed through the Purva Streaks. Other exclusive deals offered at the event are vouchers as high as Rs 10 lakhs on advance bookings during the fest.

About Puravankara Group:

The Puravankara Group is a leading real estate player in India and has established a strong presence in nine cities as well as in Bengaluru. Built over nearly 49 years, three successful residential brands have come to be through the group; these include Purva, Provident Housing Limited, and Purva Land, each one aimed at addressing a level of housing needs. The construction technology wing is Starworth Infrastructure and Construction Limited that is growing into Grade-A commercial real estate covering a total of around 3 million square feet. In addition, there is the interior design division, Purva Streaks, offering full design solutions. As of March 31, 2024, Puravankara has handed over 86 projects aggregating around 50 million square feet, with a land bank of approximately 36 million square feet, and has nearly 31 million square feet of ongoing projects.

About Puravankara Limited:

Puravankara Limited was established in 1975 and is headquartered in Bengaluru. The company is a brand leader in Indian real estate and is known for delivering quality homes on time. It has established three flagship brands: Purva, with luxury and theme-based projects; Provident Housing, for young homebuyers; and Purva Land, for investment in planned developments. Its subsidiaries include Starworth Infrastructure, which offers building solutions for technology-enhanced solutions, and Purva Streaks, integrated interior design services. The company, Puravankara, was one of the earliest developers. It operates in nine cities, including Bengaluru and Mumbai.

Key Takeaways from the Announcement

• Sterling Tools Limited has incorporated a wholly-owned subsidiary in Singapore.
• The new entity, Sterling Overseas PTE. Limited, is aimed at expanding the company's automotive business globally.
• The subsidiary has a total issued share capital of USD 1000 with 100% ownership by Sterling Tools Limited.

The new entity, registered on September 23, 2024, under the laws of Singapore with the Accounting Corporate Regulatory Authority (ACRA), is an important step in the company’s future international development.

According to the official announcement, Sterling Overseas PTE. Limited has an issued share capital of USD 1,000, with 100 ordinary shares valued at USD 10 each. The formation of the entity is an initiative intended to establish a presence for Sterling Tools in the global marketplace in the automotive sector. The new subsidiary is a key initiative to expand the operations of the business into a new global market.

This development, while involving a related party transaction, is conducted at arm's length with no additional interests from the promoter group or other group companies. The acquisition process was completed through a 100% subscription to the ordinary shares in cash, with a total investment of USD 1000.

The establishment of the new entity Sterling Overseas PTE. Limited is an initiative by Sterling Tools to develop its global footprint in automotive markets and was achieved without the need for additional government and/or regulatory approvals. The registration of the new subsidiary has commenced with the relevant authorities. 

About Sterling Tools Limited

Sterling Tools Limited, founded in 1979 by Mr. Manohar Lal Aggarwal, is an experienced manufacturer of superior-quality high-tensile cold-forged fasteners that primarily cater to the automobile industry. The management of the company is currently in the hands of the second generation of the Aggarwal family, namely Mr. Anil Aggarwal and Mr. Atul Aggarwal. STL has grown to a position of prominence in the industry and is now well known as the second-largest manufacturer of automotive fasteners in India. Furthermore, ST's subsidiary, Sterling Gtake E-Mobility Ltd. (SGEM), denotes the largest manufacturer of motor control. Units (MCUs) for the electric vehicle sector in India and also command a respectable market share of approximately 50% of high-speed scooters in India and approximately 26% of the overall MCU market.