Bajaj Housing Finance IPO: A Long-Awaited Opportunity
The much-anticipated public issue of Bajaj Housing Finance, a subsidiary of Bajaj Finance and a well-known diversified non-banking financial company (NBFC), has officially opened its doors to investors on September 9, 2024. This IPO marks a significant moment, as it is the first time in several years that a company from the esteemed Bajaj Group has launched an IPO, stirring keen interest among both retail and institutional investors. Investors can submit their bids until September 11, 2024, with the company’s shares expected to be listed on both BSE and NSE on September 16, 2024.
About Bajaj Housing Finance
Bajaj Housing Finance specializes in providing financial solutions to both individuals and businesses for purchasing and renovating residential and commercial properties. With a robust track record, the company is poised for potential growth and profitability following this IPO, which has garnered significant attention in the financial markets.
Market Expectations and Premiums
Market analysts and investors are optimistic about the stock performance of Bajaj Housing Finance on its listing day. Current gray market indicators suggest that the shares are trading at a premium of Rs 56.70, reflecting a remarkable 81% increase over the upper price band of Rs 70 set for the IPO. This translates to a possible listing price of around Rs 126.7 per share, highlighting the high demand and interest in the offering.
IPO Price Band and Details
The price band for the IPO has been set between Rs 66 and Rs 70 per share, with a minimum lot size of 214 shares. Before the IPO’s launch, Bajaj Housing Finance successfully raised Rs 1,758 crore through anchor investors, indicating strong backing from institutional players. The company aims to raise a total of Rs 6,560 crore from this public issue, which includes both new shares and an offer for sale (OFS).
Allocation of Shares
The allocation of shares in the IPO is structured as follows:
| Investor Category | Percentage of Issue |
|---|---|
| Qualified Institutional Buyers (QIBs) | 50% |
| Retail Investors | 35% |
| Non-Institutional Investors | 15% |
Additionally, a specific quota has been reserved for shareholders of Bajaj Finance and Bajaj Finserv, who held shares by the close of trading on August 30, 2024.
Use of Proceeds from the IPO
The funds raised through the issuance of new shares will be utilized by Bajaj Housing Finance to bolster its capital base. As of the end of the financial year 2024, the company reported assets under management (AUM) amounting to Rs 91,370 crore. Moreover, in the first quarter of the 2024-25 financial year, the company achieved a net profit of Rs 483 crore, reflecting a 5% year-over-year growth. Furthermore, the total net profit in FY 2024 surged 38% to reach Rs 1,731.22 crore, indicating a solid financial footing and a promising outlook for future growth.
Conclusion
The Bajaj Housing Finance IPO presents a significant opportunity for investors to participate in the growth of a stable and well-established player in the housing finance market. With the backing of the Bajaj Group and strong market expectations, this IPO could pave the way for substantial returns, both on listing day and in the long run. Investors are encouraged to consider their options carefully and stay informed as the IPO progresses.
