Use dips to buy quality large-caps, says Deven Choksey; sees long-term value in HDB Financial

Deven Choksey, MD at DRChoksey FinServ, believes individual stock opportunities will emerge in the market as we move forward. "I believe that at current levels, the market has already priced in most of the good news. So, if the market sees some correction in stock prices -- especially in some of the larger companies where we believe the growth opportunity is significant -- that would be a good time to buy into these companies. So, wait to accumulate some of the good quality large-cap stocks," the market expert said in an interaction with Business Today on Thursday.

Sharing his views on the newly listed HDB Financial Services Ltd, Choksey said, "The good thing that has happened is they are now independent of the parent company (HDFC Bank Ltd) and are charting their own course. While HDFC Bank remains an investor, HDB is now an independent entity with its own financial management. As a non-banking financial company (NBFC), they have a significant presence across various consumer finance verticals, which gives them a strong start. Although they haven't grown as fast as Bajaj Finance, there is now an opportunity to scale up. They have a strong pedigree and established systems. I would be closely watching how they adopt fintech at the front end -- if they do that well, then raising funds on the back end shouldn't be a challenge."

He added, "It's an interesting proposition at this stage. Currently, the stock price seems to reflect most of the fundamental positives. There may still be some headroom in the near term, but for long-term investors, it remains a solid hold or an add-on at lower levels."

Shares of HDB Financial, which made their stock market debut yesterday, extended their rally for a second consecutive session today, touching new highs amid a broader positive trend in domestic equity benchmarks.

The stock rose 6.04 per cent to touch a high of Rs 891.65 on BSE, marking a 20.49 per cent gain over its initial public offering (IPO) price of Rs 740 per share.

HDB Financial raised Rs 12,500 crore through its IPO, which was open from June 25 to 27. The issue was oversubscribed 16.7 times, garnering bids worth Rs 1.62 lakh crore.

As part of the offer-for-sale (OFS), HDFC Bank raised Rs 9,815 crore by offloading 13.5 crore shares in the newly listed subsidiary. Following the OFS, HDFC Bank's stake in HDB Financial has come down to 74.2 per cent from 94.5 per cent.