Bajaj Housing Finance Lists at Rs 150, Becomes Market Darling with Rs 1-Trillion Cap

Bajaj Housing Finance (BHFL) made a remarkable debut on the stock exchanges today, exceeding market expectations with its strong performance. The shares, which were issued as part of the company's Initial Public Offering (IPO), listed at Rs 150 on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), representing a 114.28% premium over the issue price of Rs 70.

With this stellar listing, Bajaj Housing Finance quickly joined the exclusive club of companies commanding a market capitalization of Rs 1 trillion. As of 10:08 AM, the stock was trading at Rs 154.9 per share, up 121% over the IPO price, with a market capitalization reaching Rs 1.3 trillion. The stock hit an intraday high of Rs 160.92 and a low of Rs 147.

Bajaj Housing Finance Investor Confidence Soars

Market analysts attribute this strong performance to investor confidence in Bajaj Housing Finance's financial strength, bolstered by its affiliation with the renowned Bajaj Group. "We have seen an IPO from the Bajaj Group after a long hiatus. Bajaj Housing Finance is a solid long-term bet, and investors should hold the stock as the positive momentum could continue in alignment with overall market sentiments," said Ambareesh Baliga, an independent market analyst.

Bajaj Housing Finance’s attractive valuation and sustained growth have made it a compelling investment. Astha Jain, Senior Research Analyst at Hem Securities, echoed this sentiment but advised caution, stating, "Investors who were allotted shares during the IPO should consider booking partial profits around Rs 150 per share while retaining some of the stock for long-term growth."

Bajaj Housing Finance Background and Strong Financials

Bajaj Housing Finance, a subsidiary of Bajaj Finance, one of India’s most diversified non-banking financial companies (NBFCs), offers a variety of financial products. These include loans for purchasing and renovating residential and commercial properties, loans against property for business or personal needs, and working capital loans for business expansion. The company also finances developers in residential and commercial property construction and provides lease rental discounting.

In its Rs 6,560-crore IPO, Bajaj Housing Finance received overwhelming investor interest, with bids for 46.28 billion shares compared to the 727.57 million shares on offer, achieving a subscription rate of 63.61 times by the close of the subscription period.

Bajaj Housing Finance Financial Performance and Valuation

The company’s financial performance has been robust. Bajaj Housing Finance reported an asset under management (AUM) of Rs 97,071 crore and boasts the lowest gross non-performing asset (GNPA) ratio among major housing finance companies (HFCs) at 0.28%. Its net NPA (NNPA) ratio stands at 0.11%, further solidifying its position as one of the most stable players in the housing finance sector.

The company has witnessed an impressive compound annual growth rate (CAGR) of 30.9% in its AUM and a profit growth rate of 56.2% between FY22 and FY24. Analysts noted that its strong brand equity, fueled by its association with the Bajaj brand, further enhances investor confidence. "The company is valued at an annualized price-to-book value (P/BV) multiple of 3.2x, based on the June quarter (Q1FY25) post-issue capital," said one analyst.

Bright Industry Outlook

The housing finance sector in India is projected to grow at a rate of 13-15% over the next three years, and analysts believe Bajaj Housing Finance is well-positioned to benefit from this growth. As one of the largest HFCs in the country, Bajaj Housing Finance is expected to capitalize on this industry trend and continue delivering strong financial results.

Shivani Nyati, Head of Wealth at Swastika Investmart, said, "This successful debut is a testament to the company’s strong fundamentals and the market’s anticipation for its growth potential. Investors who were lucky enough to receive allotments in the IPO should consider booking profits. However, those willing to hold should set a stop-loss at Rs 135 to manage risks."

Conclusion

Bajaj Housing Finance’s impressive stock market debut highlights the confidence investors have in its strong financials and growth potential. With analysts recommending a mix of profit booking and long-term holding strategies, the company is poised to continue its upward trajectory in the competitive housing finance sector. Given the positive momentum and solid industry outlook, Bajaj Housing Finance seems well-positioned for future growth.