September 19, 2024
Bajaj Housing Finance IPO: Cash in on listing day or wait for long-term gain?
 #CashNews.co

Bajaj Housing Finance IPO: Cash in on listing day or wait for long-term gain? #CashNews.co

Cash News

The buzz around Bajaj Housing Finance’s IPO feels much like a blockbuster movie release, with retail investors playing the role of eager producers, pouring in their money and then waiting anxiously for the final verdict – the allotment of shares.

It’s been the talk of the market, raking in over Rs 3.2 lakh crore in bids, a figure so massive it would make even the biggest box office hits jealous.

Investors were on the edge of their seats on Thursday as they eagerly awaited to know if they were among the ones to have been allotted the shares of Bajaj Housing Finance.

The allotments were finalised after a massive delay and now all eyes are on the listing gains that the much-anticipated public offering will offer, making investors rich.

Bajaj Housing Finance listing gains

As the much-anticipated market debut approaches, the IPO has sparked a frenzy among investors, with industry experts like Shivani Nyati, Head of Wealth at Swastika Investmart, predicting a strong stock market performance thanks to the company’s solid fundamentals and trusted Bajaj Group backing.

Nyati said that the IPO has garnered immense investor interest, evidenced by a subscription rate of 67.4 times and a sky-high grey market premium (GMP) of Rs 75.5 (107.8%). This enthusiasm reflects the company’s strong fundamentals and market anticipation.

She further added that Bajaj Housing Finance has demonstrated consistent growth in both revenue and profit, showcasing favourable financial metrics.

“The company’s association with the Bajaj Group lends credibility and trust. Moreover, the IPO’s valuation appears reasonable, further fueling investor optimism. The combination of strong financials, a reputable brand, and immense investor interest positions Bajaj Housing Finance for a potentially successful listing,” said Nyati.

Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd said that Bajaj Housing Finance Ltd IPO gives allotted investors an opportunity to invest in one of India’s leading players in the housing finance sector.

“Considering company’s strong parentage brand “BAJAJ” along with its solid position in the housing finance space with Rs 97071 cr AUM which is well-positioned itself to capitalise the industry demand and assuming to deliver impressive growth in future, like historical CAGR growth of 30.9% in AUM from Fiscal 2022 to 2024, we expect the IPO to make a robust debut and price of the company may double allotted investors’ wealth or even do more than on the listing day,” he further said.

Post listing, we recommend conservative investors to choose profit booking, if the listing gain is over and above our expectations, while long term investors can continue holding for long term growth as the sector outlook remains very optimistic given the company’s well-positioned business model. We believe housing as a sector will continue to deliver and perform well in the next 3-4 years and Bajaj Housing can tap the opportunity to lead the sector.

“On valuation parse at Rs.70/- per share, the issue was asking for a market cap of Rs.58297 cr and based on valuation which was very much in line with its other listed peers which are trading at an industry average. While BHFL’s has a well-defined credit evaluation framework, robust in-house collections infrastructure and focus on low-risk, high-growth mortgage-centric markets position it well for sustained long-term growth. The backing of the reputable “Bajaj” brand, coupled with ongoing strategic investments in technology and diversified funding avenues, further enhance BHFL’s appeal and may justify a premium valuation compared to its peers. Hence, considering all attributes, we strongly recommend allotted long term investors to “HOLD” it for a long term perspective,” he added.

Latest Grey Market Premium (GMP) for Bajaj Housing Finance

Brokerages tracking the IPO have already indicated that the IPO is set for a positive listing, with the grey market premium (GMP) indicating that investors will see their money double on listing day.

The latest GMP has seen a marginal rise at Rs 79.50, indicating that the Bajaj Housing Finance stock will get listed at Rs 149.5, marking a whopping 113.57% listing gain.

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)

Published On:

Sep 13, 2024

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