Bajaj Housing Finance IPO Debuts With Staggering 114% Premium
Given these issues, investors who have been allotted shares are advised to book profits and exit their positions for the time being, says expert
The high-profile initial public offering (IPO) of Bajaj Housing Finance, made a robust debut with a staggering 114 per cent premium at Rs 150 on the National Stock Exchange against its issue price of Rs 70 per equity share.
The IPO attempted to raise Rs 6,500 crore from the public market and closed on 11 September with a subscription worth nearly Rs 4 lakh crore. During its subscription phase, the IPO garnered a final subscription of 67 times. The retail category remained comparatively muted with a total subscription of nearly 7.4 times. However, qualified institutions poured Rs 2,60,239 crore with more than 222 times subscriptions.
Bajaj Housing Finance asset under management (AUM) stood at Rs 971 billion as of Q1FY25 and grew at a CAGR of 30.9 per cent between FY22 and FY24. The company has demonstrated robust performance through strategic emphasis on enhancing direct home loan origination and increasing average ticket size across its product suite. Given these issues, investors who have been allotted shares are advised to book profits and exit their positions for the time being,” said Prathamesh P Masdekar, Research Analyst, StoxBox.
The Rs 6,560 crore IPO consisted of a fresh issue worth Rs 3,560 crore and an offer-for-sale (OFS) worth Rs 3,000 crore. The price band of the offer is fixed at Rs 66 to 70 per equity share.
For subscriptions by employees, the reservation portion included equity shares aggregating up to Rs 200 crore and for shareholders of Bajaj Finance and Bajaj Finserv, the reservation portion included equity shares aggregating up to Rs 500 crore.
In terms of financial performance, Bajaj Housing Finance reported revenue of Rs 7,617 crore in FY 23-24 against Rs 5,665 crore in FY 22-23. The profit after tax (PAT) increased to Rs 1,731 crore in FY 23-24 against Rs 1,257 crore in FY 22-23.
The company intends to utilise the net proceeds of the offer towards augmenting its capital base to meet future business requirements of the company towards onward lending.
The company, which is a division of non-bank finance company (NBFC) Bajaj Finance, planned for IPO after the Reserve Bank of India (RBI) established standards for Bajaj Housing Finance to be listed on stock markets by September 2025 and published a list of NBFCs with Rs 500 billion in assets under management (AUM) in September 2022.
