Bajaj Finance's housing finance arm files RHP for IPO; shares up 3.2%

Bajaj Finance's housing finance arm Bajaj Housing Finance filed its Red Herring Prospectus (RHP) for an up to Rs 7,000-crore IPO

Bajaj Finance shares rose as much as 3.2 per cent on Monday, September 2, on the Bombay Stock Exchange (BSE) and registered an intraday high of Rs 7,405 per share. The upward movement in the stock came after Bajaj Finance's arm Bajaj Housing Finance filed its Red Herring Prospectus (RHP).

Bajaj Housing Finance had filed an RHP with the Registrar of Companies on Saturday, August 31, 2024.

"We wish to inform you that Bajaj Housing Finance has filed a Red Herring Prospectus (“RHP”) dated August 30, 2024, with the Registrar of Companies, Maharashtra at Pune, in connection with the IPO," the filing read.

As of 11:08 AM, shares of Bajaj Finance had risen 2.97 per cent, or Rs 214.15, to Rs 7420.3 per share. The market capitalisation of the company at around the same time stood at Rs 4,59,103.38 crore. 

In June, Bajaj Finance had announced that its arm Bajaj Housing Finance was classified as 'NBFC-Upper Layer' and hence, it is mandatorily required to be listed on or before September 30, 2025.

As per Bajaj Finance's exchange filing, Bajaj Housing Finance has proposed to undertake an IPO of its equity shares of face value of Rs 10 each, comprising a fresh issue of shares aggregating up to Rs 4,000 crore, and an offer for sale of shares by Bajaj Finance, aggregating to Rs 3,000 crore.

Headquartered in Pune, Bajaj Housing Finance offers finance to individuals as well as corporate entities for the purchase and renovation of homes or commercial spaces. It also provides loans against property for business or personal needs as well as working capital for business expansion purposes.

The company also offers finance to developers engaged in the construction of residential and commercial properties as well as lease rental discounting to developers and high-net-worth individuals.

As of March 2024, total assets of Bajaj Housing Finance stood at Rs 81,827.09 crore, compared to Rs 64,654.14 crore in the year ago.

What to do with Bajaj Finance shares?

Brokerages tracking the company have recommended buying Bajaj Finance stocks. For instance, InCred Equities has recommended to 'Add' Bajaj Finance for a target price of Rs 9,000 per share. 

The brokerage suggested adding the stock, considering overall economic revival, listing of the housing arm and the company's comfortable valuation.

Further, the company's superior positioning against most peers due to its best-in-class turnaround time, wide customer database, innovative tech platform and efficient management pedigree are also some key positives, as per InCred.

Bajaj Finance share price history

In the past one year, shares of Bajaj Finance have lost 3 per cent, compared to the BSE Sensex's rise of 26.2 per cent.