Bajaj Housing Finance has captured substantial attention in the mainboard IPO market, with its public issue generating a high level of interest among investors. The company is offering its shares in the price range of Rs 66-70 each, and investors are required to apply for a minimum of 214 shares, with the possibility of applying in multiples thereafter.
The IPO, which opened on Monday, has experienced strong demand, reflected in its impressive subscription figures. By the end of the second day of bidding, the IPO was oversubscribed by 8.01 times overall. This high level of interest is divided among different investor categories: the retail portion was subscribed 4.14 times, the Qualified Institutional Buyers (QIB) segment 7.91 times, and the Non-Institutional Investors (NII) category a remarkable 17.50 times, as of September 10, 2024, 5:41 PM.
The robust investor interest has driven up the grey market premium (GMP) for Bajaj Housing Finance’s IPO, which currently stands at Rs 65. Given the price band of Rs 66-70, the expected listing price is anticipated to be around Rs 135, implying a potential listing gain of approximately 92.86% per share. This substantial expected gain underscores the strong market enthusiasm for the offering.
Bajaj Housing Finance aims to raise a significant sum through this IPO, with a total target of Rs 6,560 crore. This amount is split between Rs 3,560 crore from a fresh share issue and Rs 3,000 crore from an offer-for-sale (OFS) by its parent company, Bajaj Finance. The IPO's bidding period is scheduled to conclude on Wednesday, September 11, 2024.
Established in 2008, Bajaj Housing Finance operates as a non-deposit-taking housing finance company and has been registered with the National Housing Bank (NHB) since 2015. The company has been providing mortgage loans since the financial year 2018 and is an integral part of the diversified Bajaj Group.
Market analysts and brokerages are largely positive about the IPO, advising investors to consider it for long-term investment due to the company’s strong parentage, solid market position, and increasing assets under management (AUM). The company is recognized for its reasonable cost of funds and significant growth potential. Nonetheless, there are concerns regarding the company's asset concentration and its exposure to the real estate sector, which may impact its performance.
Ahead of the IPO, Bajaj Housing Finance successfully raised Rs 1,758 crore from anchor investors by allocating 25,11,42,856 equity shares at Rs 70 each. The company reported a net profit of Rs 482.61 crore and revenue of Rs 2,208.73 crore for the quarter ending June 30, 2024. For the fiscal year 2023, Bajaj Housing Finance achieved a net profit of Rs 1,731.22 crore with revenue totaling Rs 7,617.71 crore.
As the largest non-deposit-taking housing finance company in India, Bajaj Housing Finance is focused on enhancing its market position through strategic emphasis on customer needs and effective risk management. The company plans to leverage advancements in technology and data analytics to improve productivity and reduce operational costs.
The IPO’s book running lead managers include Kotak Mahindra Capital Company, BofA Securities India, Axis Capital, Goldman Sachs (India) Securities, SBI Capital Markets, JM Financial, and IIFL Securities. Kfin Technologies has been appointed as the registrar for the issue. Shares of Bajaj Housing Finance are expected to be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on September 16, 2024.
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