Bajaj Housing Finance IPO Oversubscribed 67x, Stock Lists at ₹150 - Read Now
Bajaj Housing Finance made a stellar debut on the stock exchanges today, listing with a massive premium of 114% over its issue price. The stock opened at ₹150 on both the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) against its issue price of ₹70, reflecting strong investor demand and market confidence. Prior to the listing, the company's shares were trading at a grey market premium (GMP) of 120%, further building up investor enthusiasm.
The ₹6,560 crore Initial Public Offering (IPO) of Bajaj Housing Finance is the largest public offer of 2024 so far and was oversubscribed nearly 67 times the shares on offer. The impressive oversubscription and robust market debut underscore the company's strong financial health, market positioning, and investor sentiment.
The IPO and Market Reaction
Bajaj Housing Finance's IPO, which attracted significant interest from both retail and institutional investors, was seen as a key opportunity in the Indian housing finance sector. The issue's success highlights the growing appeal of the company, particularly as it operates in one of the most critical sectors of the Indian economy—housing finance.
The company's Assets Under Management (AUM) as of Q1 FY25 stood at ₹97,100 crore, making it the largest non-deposit-taking housing finance company (HFC) in the country, backed by the financial muscle of Bajaj Finance. From FY22 to FY24, the company’s AUM grew by 31%, while profit soared by 56%, demonstrating its solid financial performance and the potential for future growth.
Given this backdrop, the impressive 114% premium at listing reflects investor faith in the company's growth trajectory and its ability to leverage the strong housing finance market in India.
Industry Outlook and Growth Potential
Bajaj Housing Finance has made a name for itself as a leading player in the housing finance space, providing customized financial solutions for residential and commercial properties. Registered with the National Housing Bank since September 2015, the company has been an essential part of the Bajaj Finance ecosystem. It focuses primarily on individual retail housing loans while offering a diverse range of commercial and developer loans.
Apart from traditional home loans, the company also offers loans against property, lease rental discounting, and developer financing, ensuring a wide reach across various segments of the real estate market. The focus on individual homebuyers, coupled with commercial lending, allows the company to maintain a diversified loan book, which has been a key factor in its strong financial performance.
The Reserve Bank of India (RBI) has also categorized Bajaj Housing Finance as an upper-layer Non-Banking Financial Company (NBFC), adding to its credibility and regulatory standing. This designation ensures that the company adheres to stringent regulatory norms, boosting investor confidence in its operational resilience.
Financial Performance and Future Outlook
For the fiscal year 2023-24, Bajaj Housing Finance reported a net profit of ₹1,731 crore, marking a 38% increase from the previous year’s profit of ₹1,258 crore. The company’s net income for FY24 was ₹7,618 crore, a 34% year-on-year increase, further showcasing its strong financial position.
"Bajaj Housing Finance has demonstrated consistent growth in both revenue and profit, showcasing favorable financial metrics. The combination of strong financials, a reputable brand, and immense investor interest positions Bajaj Housing Finance for a potential success story," said Shivani Nyati, Head of Wealth, Swastika Investmart.
Market experts believe that Bajaj Housing Finance is well-positioned for long-term growth. "Investors should consider a medium- to long-term investment in Bajaj Housing Finance due to its strong growth, extensive presence in the housing finance industry, reputable group and management heritage, and competitive valuation compared to peers," noted Master Capital Services.
The company plans to utilize the proceeds from its IPO to fund future business requirements related to onward lending. With the Indian housing finance sector expected to grow significantly over the next few years, Bajaj Housing Finance is poised to capture a substantial market share, leveraging its expansive reach and diversified loan offerings.
A Strategic Win for Bajaj Finance
Bajaj Housing Finance’s IPO not only marks a success for the company but also for its parent organization, Bajaj Finance. By launching its largest IPO of the year, Bajaj Housing Finance has demonstrated the strength of the Bajaj group and its ability to unlock value for shareholders across its subsidiaries.
The company’s successful market debut has reinforced its standing as a market leader in the housing finance sector and established a solid foundation for future growth. Analysts expect Bajaj Housing Finance to benefit from both the rapid urbanization of India and the increasing demand for housing loans, particularly in metropolitan areas.
With a 114% premium on its listing price and a solid financial foundation, Bajaj Housing Finance is well-positioned for long-term success. The IPO’s overwhelming response, coupled with the company’s consistent growth, has solidified its reputation as a leading player in the housing finance industry. As it continues to expand its product offerings and deepen its market presence, Bajaj Housing Finance is likely to be a key driver of growth in India’s housing finance sector.
