December 18, 2024
Bajaj Housing Finance IPO fully subscribed within hours on opening day #IndiaFinance

Bajaj Housing Finance IPO fully subscribed within hours on opening day #IndiaFinance

CashNews.co

The Rs 6,560-crore ($782 million) initial public offering (IPO) of Bajaj Housing Finance was fully subscribed within hours of opening for bidding on Monday, with the total subscription reaching nearly twice the shares on offer by the end of the day. The IPO, which is part of the busiest week for Indian IPOs in 2024, saw bids for 1.46 billion shares, reflecting a 2.01 times subscription rate, according to data from the National Stock Exchange (NSE).
Non-institutional investors showed significant interest, subscribing to 4.35 times the shares reserved for them, while Retail Individual Investors (RIIs) subscribed to 1.50 times their allotted portion. Qualified Institutional Buyers (QIBs) secured 1.07 times the shares earmarked for them. The price band for the offer is set between Rs 66-70 per share, with the IPO scheduled to close on Wednesday, September 11.
The IPO includes a fresh issue of equity shares worth Rs 3,560 crore and an offer-for-sale (OFS) of Rs 3,000 crore by Bajaj Finance, the parent company of Bajaj Housing Finance. The public offering is part of a regulatory mandate by the Reserve Bank of India (RBI), which requires upper-layer non-banking finance companies (NBFCs) to be listed on stock exchanges by 2025.
Proceeds from the fresh issue will be used to strengthen Bajaj Housing Finance’s capital base and support future capital requirements. On Friday, the company raised Rs 1,758 crore from anchor investors, including prominent names like the Government of Singapore, BlackRock, and Abu Dhabi Investment Authority.
Investor excitement is high, with analysts attributing the robust demand to the strong reputation of the Bajaj Group and growing demand for home loans. “Investor confidence is reflected in the full subscription on day one, and there is excitement about the Bajaj group’s first public offering in a long time,” noted Asutosh Mishra, research head at Ashika Stock Broking.
Bajaj Housing Finance, established in 2015 and registered with the National Housing Bank, offers various mortgage products, including home loans, loans against property, and financing for developers. The company is set to become India’s most valuable listed home loan provider, with a valuation around $7 billion.
The Indian IPO market has experienced a surge in activity this year, with around 200 companies raising over $7 billion. “The IPO market is driven by a bullish secondary market where we are seeing an extended rally,” said Pranav Haldea, managing director of Prime Database Group. “Sentiment is positive on the back of a strong Indian economy and a huge gush of liquidity from domestic institutional and individual investors.”
India’s benchmark Nifty 50 index has gained about 15% in 2024, while domestic institutional investors have pumped in nearly $38 billion, helping offset foreign investor selling. Analysts expect the year to be one of the strongest for IPOs in India.
Bajaj Housing Finance is poised to benefit from India’s rising home prices, particularly in the luxury property market. “Amid high demand for home loans, more builders are entering the luxury segment rather than affordable because there is more money in that business,” said Arun Kejriwal, founder of Kejriwal Research.
(With inputs from agencies)