Bajaj Housing shares slip 6% on profit booking after 2-day run up

Bajaj Housing Finance shares had gained 20.9 per cent, since listing at a premium of 114%, at Rs 150 on the BSE on Monday

Newly listed Bajaj Housing Finance shares slipped 5.7 per cent and registered an intraday low of Rs 171.16 per share. The stock dropped after investors booked profits following gains in the company's stock price for two consecutive sessions since the company listed on the bourses on Monday. The scrip is still trading nearly 149 per cent above its issue price of Rs 70.

Market expert and independent analyst Ambareesh Baliga, said the correction after 2-3 upper circuits is welcome, for the company's stock.

At around 11:04 AM, shares of Bajaj Housing Finance were down 4.4 per cent at Rs 173.5 per share. In comparison, the BSE Sensex traded 177 points higher at 83,256, around the same time.

Vikas Sethi, managing director of Sethi Finmart, said the company's stock had become exorbitantly expensive compared to peers.

According to him, "Profit booking was inevitable".

The company's shares also got their first 'Buy' call from PhilipCapital, with a target of Rs 210 per share on Tuesday.

Analysts at PhillipCapital believe that Bajaj Housing Finance has a higher return ratio than its peers as it sources around 40 per cent of its home loans from its parent company, Bajaj Finance's customers. 

Additionally, Bajaj Housing gives around 90 per cent of its home loans to salaried customers, which reduces costs leading to a lower expense ratio in the medium term and augments its risk-adjusted spreads.

Bajaj Housing Finance shares gave bumper returns to investors on their listing. The shares listed on the bourses on Monday, September 16, 2024, at Rs 150 on the BSE, with a 114.28 per cent premium, surging above the IPO issue price of Rs 70.

The stock had hit its 10 per cent upper circuit limit on both the days since its listing on Monday. At the closing price, Bajaj Housing Finance was valued at Rs 1.37 trillion, making it the country’s most valuable housing finance company (HFC).

That apart, Bajaj Housing Finance IPO was the highest-ever subscribed IPO of almost 8 million (after technical rejections). It consisted of a fresh issue of Rs 3,560 crore and an offer for sale of Rs 3,000 crore by its parent company, Bajaj Finance.

Following the IPO, Bajaj Finance's stake in Bajaj Housing Finance has decreased from 100 per cent to 88.75 per cent, valuing its remaining holding at Rs 1.22 trillion.