How High Can Bajaj Housing Finance IPO Go?
The much-anticipated Initial Public Offering (IPO) of Bajaj Housing Finance has attracted significant attention in the financial markets. As a subsidiary of Bajaj Finance Ltd., a well-established name in India’s non-banking financial sector, Bajaj Housing Finance operates in the fast-growing housing finance segment. With its strong brand association and booming real estate sector, investors are keen to know how high this IPO can go. Let’s explore the key factors driving this IPO and its future potential.
1. Company Overview
Bajaj Housing Finance is a leading player in the housing finance market, providing loans for residential and commercial properties, home improvement loans, and loan refinancing. Its parent company, Bajaj Finance, is well-regarded in the financial markets, which significantly boosts investor confidence in this IPO.
Since 2018, Bajaj Housing Finance has been expanding its mortgage portfolio and today holds a significant share of the market. The company’s steady growth and its ability to maintain low levels of non-performing assets (NPAs) make it an attractive proposition for investors.
2. IPO Pricing and Details
The IPO, which opened for subscription in September 2024, is priced in a range of ₹66 to ₹70 per share. Investors need to apply for a minimum of 214 shares. The total issue size amounts to ₹6,560 crore, with ₹3,560 crore being a fresh issue and ₹3,000 crore being an offer-for-sale by its parent, Bajaj Finance.
A key factor in the success of this IPO has been its Grey Market Premium (GMP). As of the latest updates, the GMP stands at ₹78 per share, indicating an expected listing price of ₹148 per share, more than double the upper price band. This represents a potential listing gain of around 111.43% .
3. Subscription Status
The IPO witnessed overwhelming demand from all categories of investors. By the close of bidding, the offer was subscribed 63.61 times overall, with retail investors applying for 7.04 times their allocated portion and institutional buyers oversubscribing their portion by 209.36 times. This level of oversubscription highlights the strong market interest in Bajaj Housing Finance and bodes well for the stock’s listing performance.
4. Market Sentiment
The Indian IPO market is currently experiencing a boom, with strong liquidity and bullish sentiment. With the country’s housing finance sector growing steadily due to favorable government policies and increasing demand for affordable housing, Bajaj Housing Finance is well-positioned to capitalize on this trend.
Moreover, the company benefits from its parent’s reputation for financial stability and growth, which has further fueled investor optimism about its future prospects.
5. Financial Performance
Bajaj Housing Finance has a solid track record of financial growth, with its loan book growing at a compound annual growth rate (CAGR) of 31% between FY22 and Q1FY25 . The company also maintains an exceptionally low gross NPA ratio of 0.3%, ensuring strong asset quality . These financial strengths underpin investor confidence in the IPO.
6. Expected Listing Gains
The IPO is expected to generate substantial listing gains, driven by both strong demand and the company’s sound fundamentals. As noted earlier, the GMP of ₹78 suggests a potential listing price of ₹148 per share, more than doubling the investment for those who bought in at the upper end of the price band.
7. Conclusion: How High Can It Go?
Bajaj Housing Finance’s IPO is poised for significant success. With its robust financial performance, the backing of a trusted brand, and overwhelming investor demand, it could see strong listing gains. The combination of a favorable economic environment and growing demand for housing finance puts Bajaj Housing Finance in an excellent position for long-term growth. While the listing price is expected to be around ₹148 per share, it will ultimately depend on broader market conditions. However, given current indicators, the sky’s the limit for Bajaj Housing Finance’s IPO!
Check Bajaj Housing Finance IPO Allotement Status
The post How High Can Bajaj Housing Finance IPO Go? appeared first on AcconstHost.