The Bajaj Housing Finance (BHFL) initial public offering (IPO) opens on Monday, 9th September. It is set to be the biggest IPO of 2024, aiming to raise ₹6,560 crore. This includes a fresh issue of equity shares worth ₹3,560 crore and an offer for sale (OFS) of ₹3,000 crore. The new shares will help strengthen the company’s finances, while the OFS allows existing shareholders to sell their shares.
Part of the well-known Bajaj Group, BHFL is expected to attract a lot of interest from investors. The company has a solid reputation, backed by Bajaj Finance and Bajaj Auto.
The IPO is priced between ₹66 and ₹70 per share. At the upper end, the stock will be valued at 3.2 times its book value. This is higher than competitors like LIC Housing Finance (1.2x), PNB Housing (1.7x), and Can Fin Homes (2.7x). However, BHFL’s strong growth and low non-performing assets (NPAs) justify the higher valuation.
BHFL is the second-largest housing finance company in India, with assets of ₹97,071 crore. It has the lowest GNPA (0.28%) and NNPA (0.11%) ratios among major players. The company’s focus on prime salaried customers and its strong association with the Bajaj brand support its growth.
InCred Equities recommends subscribing to the IPO, noting BHFL’s potential for long-term growth despite its higher cost of funds compared to banks.
Should You Invest?
The IPO’s high profile and strong backing from the Bajaj Group make it an attractive option. BHFL’s consistent performance and growth in assets under management (AUM) suggest it could be a good investment in the long run.
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