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The Bajaj Housing Finance IPO has garnered significant attention in the Indian financial market, attracting substantial investor interest. The IPO, which opened on Monday, September 9th, witnessed a strong response on its first day, with subscriptions exceeding double the initial offer. By the end of the second day, the IPO had been subscribed an impressive 8.01 times overall, indicating a high demand for the company's shares.
The robust subscription numbers have fueled anticipation for significant listing gains. The grey market premium (GMP) for Bajaj Housing Finance's IPO currently stands at Rs 65, suggesting an expected listing price of around Rs 135. This translates to an anticipated gain of 92.86% per share, a substantial return for investors who manage to secure shares in the IPO.
The IPO is structured with a price band of Rs 66-70 per share, and investors can apply for a minimum of 214 shares and in multiples thereafter. Bajaj Housing Finance aims to raise a total of Rs 6,560 crore through this offering, with Rs 3,560 crore coming from a fresh share issue and Rs 3,000 crore from an offer-for-sale (OFS) by Bajaj Finance.
The IPO's bidding period is scheduled to conclude on Wednesday, September 11th, giving investors a final opportunity to participate. Bajaj Housing Finance, a non-deposit-taking housing finance company established in 2008 and registered with the National Housing Bank (NHB) since 2015, has been providing mortgage loans since the financial year 2018. As a member of the diversified Bajaj Group, the company holds a strong reputation and enjoys a prominent market position within the housing finance sector.
Brokerages have expressed a positive outlook on the IPO, recommending subscription for the long term due to the company's solid parentage, strong market presence, expanding assets under management (AUM), reasonable cost of funds, and promising growth potential. However, certain concerns have been raised regarding asset concentration and exposure to the real estate sector, which could pose potential risks.
Prior to 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's financial performance for the quarter ended June 30, 2024, showed a net profit of Rs 482.61 crore and revenue of Rs 2,208.73 crore. In FY23, net profit reached Rs 1,731.22 crore on revenue of Rs 7,617.71 crore. As the leading non-deposit-taking housing finance company in India, Bajaj Housing Finance is committed to bolstering its market position by prioritizing customer needs, implementing effective risk management strategies, and leveraging technology and analytics to enhance efficiency and cost optimization.
The IPO's book running lead managers include prominent financial institutions like Kotak Mahindra Capital Company, BofA Securities India, Axis Capital, Goldman Sachs (India) Securities, SBI Capital Markets, JM Financial, and IIFL Securities. Kfin Technologies is serving as the registrar for the issue, and shares are anticipated to be listed on both BSE and NSE on September 16, 2024.
Source: Bajaj Housing Finance IPO booked 8x on Day 2. Check expected listing gains