Bajaj Housing Finance’s value doubles to $16 bln in fourth-best Indian market debut this year
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Stock lists 114% higher, ends nearly 136% higher
Home loan financier valued at $16 bln vs $7 bln IPO value
Analysts caution about high valuations
Shares of rival home loan companies drop 2% to 7%
BENGALURU, Sept 16 (Reuters) – Bajaj Housing Finance’s shares (BAJO.NS)opens new tab more than doubled in their trading debut on Monday, making it the fourth-best major listing in a red-hot Indian IPO market this year and valuing the company at $16 billion, nearly triple the next-biggest rival.
The blockbuster listing follows strong demand for its $782 million initial public offering — India’s largest and most heavily subscribed in 2024 — due to booming demand for costlier homes, its link to the storied Bajaj group and relatively better financials than peers, including industry-low bad loans.
Bajaj Housing listed at 150 rupees a share, 114% above the 70 rupee-issue price, the fourth-highest listing gains among mainboard trading debuts this year.
India’s main-board IPOs in 2024 by listing price
The stock ended up 135.7% at an exchange-imposed maximum of 165 rupees, valuing it at 1.37 trillion rupees, or $16.33 billion. The next biggest home financier is HUDCO (HUDC.NS)opens new tab at $6 billion.
The surge in Bajaj Housing’s shares and comes with the broader market (.NSEI)opens new tab near all-time highs, driven predominantly by domestic investors’ appetite.
While the appetite for IPOs has been healthy — 235 firms have raised more than $8.5 billion so far this year, already surpassing the whole of 2023 — holding the listing-day gains is not necessarily a given.
For instance, only two of the three stocks with bigger listing gains this year have since moved higher.
The reason that analysts give is valuations — a concern they extend to the broader market and now also to Bajaj Housing.
“As this IPO comes from a large group, it’s generating a lot of buzz. However, the valuation seems quite rich at the moment,” said Asutosh Mishra, research head at Ashika Stock Broking.
“From the current pricing, the stock could underperform in the medium term despite solid financial performance, which may not be immediately reflected in the stock price once current euphoria settles down.”
India sees rush of primary market activity
Sanjiv Bajaj, chairman of Bajaj Housing, though, told CNBC-TV18opens new tab the company’s net interest margin is likely to be stable and forecast industry-wide credit growth of 12%-15%. Its NIM was 3.9% in the latest quarter.
Bajaj Housing’s public debut weighed on rivals: HUDCO fell 2%, while LIC Housing (LICH.NS)opens new tab dropped 6% and PNB Housing (PNBH.NS)opens new tabslid 6.6%.
Bajaj Housing, a unit of non-bank lender Bajaj Finance (BJFN.NS)opens new tabhad assets under management (AUM) of over 970 billion rupees as of June 30, making it the No.2 home loan financier by AUM after LIC Housing. Its profit rose 38% last fiscal year.
($1 = 83.8970 Indian rupees)
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Reporting by Dimpal Gulwani and Bharath Rajeswaran in Bengaluru; Editing by Eileen Soreng and Savio D’Souza
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