Bajaj Finance stock gains 4% on IPO plans of subsidiary Bajaj Housing Fin

Shares of Bajaj Finance gained 4.1 per cent at Rs 7,201 per share on the BSE in Friday’s intraday trade. This came after the company on Thursday announced its subsidiary Bajaj Housing Finance’s board has approved an initial public offering (IPO) with a fresh issue of shares to raise up to Rs 4,000 crore. 

The plan entails raising Rs 4,000 crore through a combination of fresh issue and an offer-for-sale (OFS) component. The public issue will involve the sale of shares by existing shareholders.

Bajaj Housing Finance, a wholly-owned subsidiary of Bajaj Finance, operates as a mortgage financier with assets under management totaling Rs 91,370 crore as of March 31, 2024. Classified as an upper-layer non-banking financial company (NBFC) according to the Reserve Bank of India's (RBI), Bajaj Housing Finance holds a significant position in the market.

In compliance with RBI regulations issued in September 2022, which identified 15 NBFCs in the upper layer due to their loan book exceeding Rs 50,000 crore, Bajaj Housing Finance is required to list its shares on the exchanges by September 2025.

For the fourth quarter ending March 31 of fiscal year 2024, Bajaj Finance posted a 21.1 per cent year-on-year increase in its net profit, reaching Rs 3,824.53 crore. Additionally, the net interest income (NII) also surged by 21.1 per cent, amounting to ₹3,824.53 crore compared to Rs 3,157.8 crore in the corresponding quarter of FY23.

At 11:54 AM, Bajaj Finance was trading 3.98 per cent higher at Rs 7198.70 a piece on the BSE. By comparison the BSE Sensec climbed up by 1.89 per cent. The stock of the company is presently trading at a price to earnings multiple of 33.89 times with an earning per share of Rs 204.27.