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The Bajaj Housing Finance IPO has captured the spotlight of the mainboard IPO market with a buzz that’s hard to ignore. On its second day of bidding, the public issue has seen continued strong interest from investors, sparking a flurry of activity.
The IPO, which opened on Monday, saw its subscription more than twice on the first day. As of latest data for the second day, the IPO was subscribed 8.01 times overall.
The IPO was subscribed 4.14 times in the retail category, 7.91 times in the Qualified Institutional Buyers (QIB) category, 17.50 times in the Non-Institutional Investors (NII) category as of September 10, 2024, 5:41 PM.
What is expected listing gain for Bajaj Housing Finance IPO?
The high demand has driven up the expected listing gains, with the grey market premium (GMP) for Bajaj Housing Finance’s IPO currently standing at Rs 65.
Given the price band of Rs 66-70, the expected listing price is around Rs 135, suggesting an anticipated gain of 92.86% per share.
Bajaj Housing Finance is offering its shares in the price range of Rs 66-70 each. Investors can apply for a minimum of 214 shares and in multiples thereafter. The company aims to raise Rs 6,560 crore through this IPO, with Rs 3,560 crore coming from a fresh share issue and Rs 3,000 crore from an offer-for-sale (OFS) by Bajaj Finance.
The IPO’s three-day bidding period will end on Wednesday, September 11.
Founded in 2008, Bajaj Housing Finance is a non-deposit-taking housing finance company registered with the National Housing Bank (NHB) since 2015. It has been providing mortgage loans since the financial year 2018 and is part of the diversified Bajaj Group.
Brokerages view the IPO positively. They recommend subscribing for the long term due to the company’s solid parentage, strong market position, growing assets under management (AUM), reasonable cost of funds, and strong growth potential. However, concerns include asset concentration and exposure to the real estate sector.
Ahead of the IPO, Bajaj Housing Finance raised Rs 1,758 crore from anchor investors by allocating 25,11,42,856 equity shares at Rs 70 each. For the quarter ended June 30, 2024, the company reported a net profit of Rs 482.61 crore and revenue of Rs 2,208.73 crore. For FY23, the net profit was Rs 1,731.22 crore on revenue of Rs 7,617.71 crore.
As the largest non-deposit-taking housing finance company in India, Bajaj Housing Finance plans to strengthen its market position with strategic focus on customer needs and risk management. The company aims to leverage technology and analytics to enhance productivity and reduce costs.
The book running lead managers for the IPO include Kotak Mahindra Capital Company, BofA Securities India, Axis Capital, Goldman Sachs (India) Securities, SBI Capital Markets, JM Financial, and IIFL Securities.
Kfin Technologies is the registrar for the issue. Shares are expected to be listed on both BSE and NSE on September 16, 2024.