Bajaj Housing Finance IPO: The initial public offering (IPO) of Bajaj Housing Finance Limited (BHFL) hit the Indian primary market on Monday this week. The mainboard issue will remain open until 11th September 2024 i.e. Wednesday this week. According to Bajaj Housing Finance's IPO subscription status, the public issue has received a strong response from primary market investors. The price band for the Bajaj Housing Finance IPO has been set at ₹66 to ₹70 per share for the public offering.
Meanwhile, after a strong response from investors, the grey market has gone bullish on the mainboard IPO. According to stock market experts, Bajaj Housing Finance IPO GMP today is ₹59, which is ₹4 higher than Monday's GMP of ₹55.
As per BSE data, the initial public offer of Bajaj Housing Finance IPO was subscribed 5.29 times by 2:51 PM on day two of bidding. The retail portion of the public issues was booked 3.34 times, the NII segment was filled 13.06 times, and the QIB segment was subscribed 2.61 times.
Under the shareholders' quota, Bajaj Housing Finance has set aside equity shares totalling up to ₹500 crore. This section, according to the firm, is reserved for individuals and Hindu Undivided Families (HUFs) that own public stock in the company's promoters.
In addition to the standard reservations for retail, institutional, and non-institutional investors, Bajaj Housing Finance has set aside a specific quota for shareholders in the IPO.
In initial public offerings where the company's parent companies are already listed on markets, a shareholders' quota is typically provided. This is carried out as an exclusive perk to appease parent company shareholders.
Bajaj Housing is a non-deposit housing financing company that has provided mortgage loans since the fiscal year 2018. Driven by Bajaj Finserv Ltd and Bajaj Finance Ltd, Bajaj Housing Finance is a subsidiary of the Bajaj Group. Bajaj Housing Finance is a wholly owned subsidiary of Bajaj Finance, according to news reports. In Bajaj Finance, Bajaj Finserv owns a 51.34% stake.
According to the brokerage, Bajaj Housing Finance gains from the famous Bajaj Group's heritage. The business has shown stable sales and profit growthand strong financial indicators. The IPO's valuation is reasonable. There is a great deal of demand and expectation for the IPO.
We advise subscribing to the IPO in order to potentially benefit from listing gains and long-term value appreciation, given the company's solid history, outstanding financial performance, and exciting market.
Research Analyst Prathamesh Masdekar at StoxBox states that Bajaj Housing Finance, which has an AUM of Rs. 971 billion as of Q1FY25, is the largest non-deposit-taking HFC promoted by Bajaj Finance. It has been lending money for mortgages since FY18. With a network of 215 branches, the HFC concentrates its segment efforts on the top 20–30 cities while concentrating its commercial sector activities in the top 8 metro areas.
Between FY22 and FY24, the company's AUM increased at a compound annual growth rate of 30.9%. Given its current development trajectory, the RBI ranks the firm as the fourth fastest-growing NBFC in India's upper-layer category. Strategic focus on improving direct home loan origination and raising Average Ticket Size throughout its product suite has allowed the firm to show strong results.
The issue is fairly valued based on FY24 book value, with a P/BV of 3.8x on the upper price band. Because of this, the analyst advises a Subscribe rating for the issue. This is supported by a robust credit underwriting procedure and risk management structure that minimize adverse effects on asset quality.
Bajaj Housing Finance IPO consists of an offer for sale (OFS) of equity shares by parent company Bajaj Finance for a total of ₹3,000 crore and a new issue of equity shares up to ₹3,560 crore.
The aim of the share offering is to satisfy the directive from the Reserve Bank of India (RBI) for higher layer non-banking financial organisations (NBFCs) to list on stock exchanges by September 2025.
To meet its future capital requirements, the firm will use the proceeds from the new offer to expand its capital base.
Axis Capital Ltd, Goldman Sachs (India) Securities Private Ltd, SBI Capital Markets Ltd, JM Financial Ltd, IIFL Securities Ltd, and Kotak Mahindra Capital Company Ltd are the book running lead managers for the offering.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.
