Ahead of Bajaj Housing Finance IPO, GMP rises; here’s what experts say about the listing price and valuations

Bajaj Housing Finance IPO: Following the announcement of the allocation of shares to the applicants, the Bajaj Housing Finance IPO Listing Date The IPO has been set for September 16, 2024, i.e. next Monday. Following the announcement of the listing date, the grey market has become even more optimistic about the initial public offering (IPO). According to stock market Observers, Bajaj Housing Finance Limited shares are available at a premium of ₹79 on the grey market today.

However, stock market experts advise new investors to be cautious after the listing, as Bajaj Housing Finance IPO Price Listing may not justify the company’s fundamentals. They said the IPO price of Bajaj Housing Finance could be around $145-$160. ₹150, which is around 110 per cent higher than the upper price band of the public issue. Therefore, the book value of Bajaj Housing Finance stock after listing is expected to be around 6-6.50 times, while its closest peer PNB Housing Finance has a book value of around 2.

Bajaj Housing Finance IPO GMP Today

Market observers said that Bajaj Housing Finance IPO (Gray market premium) today is ₹79, ₹2 higher than Friday’s GMP ₹77. They said the grey market has remained bullish on Bajaj Housing Finance IPO despite the discounted close on Friday, which augurs well for the listing of Bajaj Housing Finance IPO on Monday.

As for the grey market sentiments for Bajaj Housing Finance IPO, market watchers said that the grey market indicates that the listing price of Bajaj Housing Finance IPO would be around $100,000. ₹149 ( ₹70 + ₹79) Thus, the grey market is signalling a 110 per cent surge in quotes for Bajaj Housing Finance IPO allottees on Monday.

Bajaj Housing Finance Post-Listing IPO Valuations

When asked about the valuations of Bajaj Housing Finance stock post listing, Arun Kejriwal, Founder, Kejriwal Research and Investment Services said, “The post-money NAV of Bajaj Housing Finance Limited is hovering between 21-22. If the stock delivers multibagger returns as indicated by the market, the book value of the new Bajaj Group stock will hover between 6-6.50, more than three times its nearest peer PNB Housing Finance. Therefore, allottees and new investors are advised to remain vigilant and not fall prey to the strong debut of this new Bajaj Group stock.”

Astha Jain, Senior Research Analyst at HEM Securities, commented on why Bajaj Housing Finance’s IPO listing may not justify the company’s fundamentals: “The beyond-expected hype around Bajaj Housing Finance’s IPO is due to the performance of other Bajaj Group stocks. In the NBFC segment, Bajaj Group stock has delivered stellar returns to its shareholders and allottees over the long term, and new investors can expect the same from this new Bajaj Group stock, which is listed on the BSE and NSE on Monday. Hence, Bajaj Housing Finance’s IPO listing price may not justify the fundamentals, and its book value is expected to remain higher than its peers. Therefore, I would recommend Bajaj Housing Finance IPO allottees to book a partial profit and hold the stock for the long term, maintaining a ‘buy, hold and forget’ strategy as it is expected to become a portfolio stock for long-term investors.” long term.

Bajaj Housing Finance Financial Data

Commenting on Bajaj Housing Finance Limited’s financials, Prathamesh Masdekar, Research Analyst at StoxBox said, “Bajaj Housing Finance Ltd. is the largest non-deposit taking HFC promoted by Bajaj Finance Ltd. and is into home lending since FY18 with an AUM of Rs 971 billion as of Q1FY25. Additionally, the company has a robust four-tier in-house collections infrastructure comprising of contactless collections (telecall), field collections, legal recovery and settlement to assist them with loan collections. They have also set up a dedicated collections team to handle cases where collections are overdue for a particular period and a separate team to focus on resolving the cases through SARFAESI (Act). As a result, collections efficiency improved from 98.4% in FY22 to 99.5% in FY24.”

“These credit and risk management policies have helped it maintain the lowest GNPA and NNPA among industry peers. The company’s AUM has grown at a CAGR of 30.9% between FY22 and FY24. This growth trajectory positions the company as the fourth fastest-growing NBFC within the top-tier category in India (as per RBI). The company has demonstrated strong performance by strategically emphasizing direct origination of home loans and increasing average ticket size across its product range. These measures have improved Opex/Assets ratio over the past few years. Further, the strategic shift in AUM and product mix has mitigated the adverse effects of rising funding costs on the portfolio spread,” StoxBox expert said.

Disclaimer: The opinions and recommendations above are those of individual analysts or brokerage firms, not those of Mint. We recommend that investors consult with certified experts before making any investment decisions.