Bajaj Housing Finance's $782 mn float kicks off busy week for Indian IPOs

Bajaj Housing Finance's $782 million public offer was fully subscribed on the first day of bidding on Monday, kicking off the busiest week for Indian IPOs so far this year as companies seek to capitalise on a booming stock market amid a retail investor frenzy.

India's stock market has hit record highs over 50 times this year and has seen about 200 companies raise more than $7 billion through IPOs, including high-profile offerings from EV-maker Ola Electric Mobility and telecom operator Bharti Hexacom.

This week alone, IPOs of 16 companies open for subscription, including Bajaj Housing Finance's smaller peer Sammaan Capital.

"The IPO market is driven by a bullish secondary market where we are seeing an extended rally," Pranav Haldea, managing director of capital market information provider Prime Database Group, said.

"Sentiment is positive on the back of a strong Indian economy and a huge gush of liquidity from domestic institutional and individual investors. This year is on track to be the best IPO year in India."

India's benchmark Nifty 50 index has gained about 15 per cent in 2024, as domestic institutional investors have pumped in nearly $38 billion, offsetting selling by foreign investors. Systematic investment plan contributions in mutual funds have hit record highs for 13 straight months.

Bajaj Housing Finance's float, one of India's largest offerings this year, is set to make the firm the country's most valuable listed home loan provider at a valuation of around $7 billion.

Non-institutional investors bid for more than twice the shares reserved for them by 2:03 p.m. IST on Monday, exchange data showed. Retail investors bid for about 99 per cent of the shares earmarked for them.

The shares are being offered in a 66-70 rupee band. The IPO will close on Wednesday.

The company, a unit of non-bank lender Bajaj Finance, has already raised about $209 million from major institutional investors including the government of Singapore, BlackRock and Abu Dhabi Investment Authority.

Bajaj Housing Finance stands to benefit from India's rising home prices, driven by demand for luxury properties, which forms a major part of its business.

Its "strong pedigree" will attract investor interest, Kranthi Bathini, equity strategist at WealthMills Securities, said.

"We are seeing a 76-77 per cent grey market premium for the IPO," Arun Kejriwal, founder of Kejriwal Research, said.

"Amid high demand for home loans, more builders are entering the luxury segment rather than affordable because there is more money in that business."