India's leading private bank, HDFC Bank Ltd., has given preliminary approval to initiate the listing process for its subsidiary, HDB Financial Services Ltd., through an initial public offering (IPO). The company's board has authorized a committee of directors to oversee the necessary steps for this endeavor, according to an announcement made in an exchange filing on Saturday.

The requirement for the listing arises from the Reserve Bank of India's October 2022 circular, which mandates that entities classified as Upper Layer NBFCs must go public by September 2025. HDFC Bank's Chief Financial Officer, Srinivasan Vaidyanathan, mentioned in a January analyst call that the bank aims to start preparatory activities within the coming months to ensure flexibility in timing the market entry.

HDB Financial Services, which expanded its footprint with 16 new branches in the quarter ending December, now operates 1,618 branches across 1,125 cities, serving 14.6 million customers.

In financial results, HDFC Bank reported a 2% decrease in net profit quarter-on-quarter for the three months ending June, totaling Rs 16,174.75 crore, compared to Rs 16,510 crore in the previous quarter. The bank's net interest income, or core income, saw a 2% sequential increase to Rs 29,837 crore, while other income rose by 16% to Rs 10,668 crore. This decline in net profit was attributed to slower core income growth and higher tax expenses.