Bajaj Housing Finance IPO doubles money on listing; book profit or hold?

Bajaj Housing Finance IPO listing: Shares beat GMP at listing with 114 per cent premium. The m-cap of the company surpassed Rs 1-trillion mark within minutes of the mega listing

Bajaj Housing Finance IPO listing today: Bajaj Housing Finance shares made a bumper debut on the stock exchanges today, riding high on the positive market sentiment. Bajaj Housing shares listed at Rs 150 on the BSE, and the National Stock Exchange (NSE), surging 114.28 per cent above the IPO issue price of Rs 70 on Monday.

Roughly 697.62 million shares, together, changed hands on the NSE and the BSE, resulting in the stock hitting 10-per cent upper circuit during the day.

By close, the share commanded a market price of Rs 165 per share, a staggering 137 per cent surge over its issue price. Its market-cap stood at Rs 1.37 trillion. By comparison, the benchmark BSE Sensex ended 98 points (0.12 per cent) higher on the BSE on Monday. 

Analysts say the listing reflects investors' unwavering confidence in the company's robust financials, backed by the prestigious Bajaj Group.

Bajaj Housing Finance's consistent growth, coupled with its reasonable valuation, made it a highly attractive investment proposition, they said. 

Going ahead, Ambareesh Baliga, an independent market analyst, says investors should continue to hold the stock for some time.

"We have seen an IPO coming from Bajaj Group after a really long time. Bajaj Housing is a long-term bet and investors may hold it for some time as positive momentum may continue in the stock as long as the overall market sentiment remains buoyant," he said.
 

Astha Jain, senior research analyst at Hem Securities, however, believes investors, who received the stock during IPO allotment, may book partial profit at around Rs 150 per share, but maintain exposure on the remaining holding as Bajaj Housing Finance may emerge as a long-term wealth creator. 

Bajaj Housing Finance is a subsidiary of Bajaj Finance — one of the most diversified NBFCs in the Indian market. 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. BHFL 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.

Bajaj Housing Finance's Rs 6,560-crore IPO had received a massive response from investors as it received bids for 46,28,35,82,522 shares against 72,75,75,756 shares offered in the IPO, thus getting subscribed 63.61 times by the final day of subscription.

According to analysts the company is valued at annualised price-to-book value (P/BV) multiple of 3.2x (based on the upper price band on the post-issue capital) at the end of the June quarter of the current financial year (Q1FY25). 

It is the second largest housing finance company in India having an asset under management (AUM) of Rs 97,071 crore with the lowest gross non-performing asset (GNPA) ratio of 0.28 per cent and net NPA (NNPA) ratio of 0.11 per cent among large HFCs. 

The company has witnessed an AUM growth of 30.9 per cent and profit growth of 56.2 per cent over FY22-24 period. The company's association with the brand 'Bajaj', they said, helps it enjoy a strong brand equity. 

As industry watchers expect the housing finance industry to grow in the range of 13-15 per cent for the next three years, they believe Bajaj Housing Finance td is well placed to capitalise the growth in the housing finance sector.

"This successful debut is a testament to the company's strong fundamentals and the market's anticipation for its growth potential. Investors who were fortunate enough to secure allotments in the IPO may consider booking profit now, but those who want to hold their positions may do so by potentially setting a stop loss at Rs 135 as a risk management strategy," said Shivani Nyati, head of wealth, Swastika Investmart.