If current trends continue, analysts expect the company to double investors’ wealth on the day it goes public.
Bajaj Housing Finance Shares will debut on the stock exchanges on Monday, September 16, 2024.
The strong demand was also seen in the subscription numbers as the issue attracted the highest number of bids by value in India’s history.
Bajaj Group’s Rs 6,560 crore initial public offering received bids worth Rs 3.24 lakh crore. The total subscription was nearly 64 times the number of shares on offer.
The quota reserved for retail individual investors (RIIs) was subscribed 7.04 times, that of qualified institutional buyers 209.36 times and that of NII 41.51 times.
Stock price gains aside, analysts are quite bullish on the company even from a long-term perspective.
After the listing, Prashanth Tapse of Mehta Equities advised conservative investors to opt for profit booking if the listing earnings beat Wall Street expectations.
However, Tapse suggested that long-term investors can continue to hold the stock for long-term growth as the sector’s outlook remains very optimistic given the company’s well-positioned business model.
“We believe that the housing sector will continue to deliver strong returns and perform well in the next 3-4 years and Bajaj Housing can seize the opportunity to lead the sector,” Tapse said.
According to Shivani Nyati of Shivani Nyati, the combination of strong financials, a reputable brand and immense investor interest positions Bajaj Housing Finance for a potentially successful listing.
Prathamesh Masdekar of StoxBox anticipates a strong debut on the stock markets on Monday, with an expected premium of 107% above the upper band price.
Prior to the opening of the IPO, the company had raised ₹1,758 crore through anchor investors’ portfolio. The anchor investors included prominent names such as the Government of Singapore, ADIA, Fidelity, Invesco, HSBC, Morgan Stanley, Nomura and JP Morgan.
The price band for the IPO was set at ₹66-70 per share.
Promoted by Bajaj Finance and Bajaj Finserv, the company planned to raise ₹6,560 crore through the offer that included a fresh share sale of ₹3,560 crore and ₹3,000 crore through an offer for sale (OFS).
The proceeds from the issue will be used to increase the capital base of the Company to meet the Company’s future business needs for future borrowings.
The public offer must comply with the Reserve Bank of India’s mandatory requirement for ‘top-tier’ NBFCs to list within three years of notification, i.e. September 2025.
Established in 2008, Bajaj Housing Finance is a non-deposit taking Housing Finance Company (HFC) registered with the National Housing Bank (NHB) since 2015 and offering home loans since FY18. The company is a part of the Bajaj Group, a diversified group of companies with interests across diverse sectors.
The housing finance market has grown by 13.1% over FY19-FY23 and Crisil expects a growth of 13-15% over FY24-FY27. The company’s AUM stands at Rs 91,370 crore in FY24 and Rs 97,071 crore in Q1 FY25. AUM growth was 30.9% and earnings growth stood at 56.2% over FY22-FY24.
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