Bajaj Housing Finance IPO Opens Today: Big Buzz Around ₹6,560 Cr Offer – Should You Invest?

The Rs 6,560 crore initial public offering (IPO) of Bajaj Housing Finance is now open for subscription, starting Monday and closing on September 11. This is a major IPO that has already generated significant interest from big investors.

Pre-IPO Fundraising

Before the IPO officially opened, Bajaj Housing Finance raised Rs 1,758 crore from well-known investors such as JP Morgan, Morgan Stanley, Nomura, and HDFC Mutual Fund.

Bajaj Housing Finance IPO Size and Structure

The total IPO size is Rs 6,560 crore. This includes Rs 3,560 crore worth of fresh equity shares and a Rs 3,000 crore offer for sale (OFS). Bajaj Housing Finance is promoted by Bajaj Finance and Bajaj Finserv.

Price Band and Lot Size

The price for the IPO has been set at Rs 66-70 per share. Investors can bid for a minimum of 214 shares in one lot.

Grey Market Premium (GMP)

Ahead of the IPO launch, shares of Bajaj Housing Finance are trading at a grey market premium (GMP) of Rs 52. This suggests that the shares could list at a price about 73% higher than the issue price.

Expert Recommendations

Analysts recommend subscribing to the IPO despite its premium valuation. They highlight the strong backing of the Bajaj group, the company’s good financial performance, and its potential for future growth in both housing finance and commercial real estate.

Incred Equities said, “While mortgages may seem simple, there are multiple opportunities in a growing market like India. Bajaj Housing Finance has a management team with a strong vision, which makes it a good option for mid- to long-term investment. We suggest subscribing to the IPO.”

YES Securities added, “The company could see significant growth in the next 12-15 months, with an expected 25-30% increase in assets and earnings. Bajaj Housing Finance has strengths in executing its growth plans, managing risk, and improving operating efficiency.”

Use of Funds

The company will use the money raised from the IPO to increase its capital base, which will help support future lending and business needs.

Company Background

Bajaj Housing Finance is a non-deposit-taking housing finance company (HFC) registered with the National Housing Bank since 2015. The company offers various financial solutions for buying and renovating both residential and commercial properties. The company has also been recognised as an upper-layer non-banking financial company (NBFC) by the Reserve Bank of India.

Its product range includes home loans, loans against property, lease rental discounting, and financing for property developers. Bajaj Housing Finance mainly focuses on retail housing loans but also offers commercial and developer loans.

Financial Performance

For the financial year 2023-24, the company reported a net profit of Rs 1,731 crore, which is a 38% increase from Rs 1,258 crore in the previous year. Its net income also grew by 34% year-on-year, reaching Rs 7,618 crore.

Lead Managers

The lead managers for this IPO are Kotak Mahindra Capital, BofA Securities, Axis Capital, Goldman Sachs (India) Securities, SBI Capital Markets, JM Financial, and IIFL Securities.

Conclusion

Bajaj Housing Finance’s IPO is one of the biggest this year, and with strong interest from anchor investors, expert recommendations, and a good financial track record, it’s worth considering for both short- and long-term investors.