The Bajaj Housing Finance IPO has become the talk of the town in the mainboard IPO market, witnessing massive investor interest. By the second day of bidding, the public issue had drawn significant attention, reflecting its strong appeal among retail and institutional investors alike.
The Initial Public Offering (IPO), which opened for subscription on Monday, September 9, 2024, witnessed robust demand right from the start, getting subscribed more than twice on the first day itself. As per the latest data available on September 10, 2024, at 5:41 PM, the IPO saw an overall subscription of 8.01 times.
The breakdown of this high demand is as follows:
Retail Investors subscribed to the issue 4.14 times.
Qualified Institutional Buyers (QIBs), who are often seen as market trendsetters, subscribed to the IPO 7.91 times.
Non-Institutional Investors (NII) demonstrated the highest enthusiasm, subscribing to the issue a whopping 17.50 times.
Such overwhelming demand has fueled expectations of significant listing gains. Currently, the grey market premium (GMP) for Bajaj Housing Finance’s IPO stands at Rs 65, indicating an expected listing price of Rs 135. With the IPO's price band set between Rs 66-70, this implies a potential 92.86% gain per share, making it one of the most anticipated IPO listings in recent times.
The IPO offers shares in the price range of Rs 66-70 each, with investors required to apply for a minimum lot size of 214 shares and multiples thereafter. Through this public issue, Bajaj Housing Finance aims to raise a total of Rs 6,560 crore. This amount comprises Rs 3,560 crore from a fresh issue of shares and Rs 3,000 crore via an offer-for-sale (OFS) by its parent company, Bajaj Finance.
The IPO bidding period spans three days, closing on Wednesday, September 11, 2024.
Founded in 2008, Bajaj Housing Finance is a non-deposit-taking housing finance company registered with the National Housing Bank (NHB) since 2015. The company began providing mortgage loans in FY 2018 and is part of the esteemed Bajaj Group. Over the years, Bajaj Housing Finance has solidified its position as one of India’s leading housing finance providers.
Brokerages have a positive outlook on this IPO, recommending long-term subscriptions due to the company's strong parentage, established market presence, and consistent growth in assets under management (AUM). Furthermore, the company’s reasonable cost of funds and strategic growth potential are considered key strengths. However, there are concerns regarding the concentration of assets and the company’s exposure to the real estate sector, which remains volatile.
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 per share. The company’s financial performance has also been impressive. For the quarter ended June 30, 2024, Bajaj Housing Finance reported a net profit of Rs 482.61 crore and a revenue of Rs 2,208.73 crore. For the full FY23, the company posted a net profit of Rs 1,731.22 crore on a revenue of Rs 7,617.71 crore.
As the largest non-deposit-taking housing finance company in India, Bajaj Housing Finance continues to strengthen its market position. The company has a strategic focus on addressing customer needs while managing risks effectively. Additionally, technology and analytics are central to the company’s strategy, helping to enhance productivity and reduce costs.
The book-running lead managers for this IPO include prominent names like Kotak Mahindra Capital Company, BofA Securities India, Axis Capital, Goldman Sachs (India) Securities, SBI Capital Markets, JM Financial, and IIFL Securities. The registrar for the issue is Kfin Technologies, and the shares are expected to be listed on both BSE and NSE on September 16, 2024.
With such strong investor demand and promising growth prospects, the Bajaj Housing Finance IPO is expected to deliver significant listing gains, making it a highly anticipated listing in the Indian stock market. The combination of robust financial performance, the solid backing of the Bajaj Group, and high investor interest indicates that this IPO could offer substantial value to both retail and institutional investors.