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Bajaj Housing Finance Limited launched its initial public offering (IPO) on September 9, aiming to raise ₹6,560 crore. The issue, which will close on September 11, has set a price band between ₹66-70. The company has already secured ₹1,758 crore from anchor investors and has reserved specific portions for various investor categories, including a special quota for shareholders.
The IPO was subscribed 2.26 times by the end of Day 1 and 8.08 times by the end of Day 2
The IPO consists of a fresh issue of 50.86 crore shares, aggregating to ₹3,560 crore, and an offer for sale of 42.86 crore shares, totaling ₹3,000 crore. The proceeds from the fresh issue will be used to strengthen the company’s capital base to support future lending operations.
Retail investors can apply with a minimum lot size of 214 shares, requiring an investment of ₹14,980. In terms of allocation, 50% of the shares in the public issue are reserved for qualified institutional buyers (QIBs), 15% for non-institutional investors (NIIs), and at least 35% is earmarked for retail investors.
The allotment for the IPO is expected to be finalized on Thursday, September 12, 2024, with a tentative listing date on the BSE and NSE set for Monday, September 16, 2024.
Bajaj Housing Finance IPO Live Updates: Subscription status at 4:50 pm
The initial public offer of Bajaj Housing Finance IPO has been subscribed 67.35 times on the third day of subscription today, at 4:50 pm. The issue received bids for 4,620.14 crore shares as against 68.6 crore on offer.
The portion for retail investors received 7.29 times subscription while the quota for non-institutional investors got subscribed 43.91 times. The qualified institutional buyers (QIBs) part is booked 222.05 times. The employee portion has been subscribed 2.08, and others portion has been subscribed 18.43 times.
Bajaj Housing Finance IPO Live Updates: BP Equities recommends ‘subscribe’
Bajaj Housing Finance Ltd., the largest non-deposit-taking housing finance company (HFC) promoted by Bajaj Finance Ltd., has been involved in mortgage lending since FY18, with assets under management (AUM) reaching ₹97,100 crore by Q1FY25. The company’s AUM has grown at a compound annual growth rate (CAGR) of 30.9% between FY22 and FY24, making it the fourth fastest-growing non-banking financial company (NBFC) in the upper-layer category, as classified by the RBI.
BP Equities noted that the issue is valued at a price-to-book value (P/BV) of 3.8x at the upper price band, based on FY24 book value, which they consider to be fairly priced. They recommended a “Subscribe” rating for the IPO, citing Bajaj Housing Finance’s strong credit underwriting process and risk management framework, which help mitigate risks to asset quality.
Bajaj Housing Finance IPO Live Updates: Subscription status at 3:50 pm
The initial public offer of Bajaj Housing Finance IPO has been subscribed 66.65 times on the third day of subscription today, at 3:50 pm. The issue received bids for 4,571.96 crore shares as against 68.6 crore on offer.
The portion for retail investors received 7.11 times subscription while the quota for non-institutional investors got subscribed 43.64 times. The qualified institutional buyers (QIBs) part is booked 219.78 times. The employee portion has been subscribed 2,03, and others portion has been subscribed 18.22 times.
Bajaj Housing Finance IPO Live Updates: A bumper listing could lift Bajaj Finance share price by 5%, says Macquarie
A strong listing of Bajaj Housing Finance shares could potentially lift the share price of its parent company, Bajaj Finance, by up to 5%, according to Macquarie analysts. Macquarie analysts highlighted that at the ₹70 per share mark, Bajaj Housing Finance is trading at 2.6x FY26E P/BV with a return on assets (RoA) profile of 2.5%. They project a reduction in return on equity (RoE) from 15% to 12% due to the fresh capital raised.
The analysts also noted that a successful listing of Bajaj Housing Finance could prompt a re-rating of other housing finance companies. With the current grey market premium around ₹56, if Bajaj Housing Finance lists at a 50% premium, Bajaj Finance could see a 5% implied upside in its stock price based on a sum-of-parts valuation.
Bajaj Housing Finance IPO Live Updates: ₹1,758 crore From Anchor Investors
Just ahead of its initial public offering (IPO), the company raised ₹1,758 crore from anchor investors on September 5, according to PTI. Prominent anchor investors include the Government of Singapore, Abu Dhabi Investment Authority (ADIA), Fidelity, Morgan Stanley, Nomura, Goldman Sachs, JP Morgan India Investment Trust Plc, SBI Life Insurance, ICICI Prudential Life Insurance, HDFC Mutual Fund, Kotak Mahindra MF, SBI MF, UTI MF, and Nippon India MF.
The company allocated 25.11 crore equity shares to 104 funds at ₹70 per share, the upper end of the price band, bringing the total transaction to ₹1,758 crore.
Bajaj Housing Finance IPO Live Updates: Subscription status at 2:45 pm
The initial public offer of Bajaj Housing Finance IPO has been subscribed 47.38 times on the third day of subscription today, at 2:45 pm. The issue received bids for 3,250.24 crore shares as against 68.6 crore on offer.
The portion for retail investors received 6.81 times subscription while the quota for non-institutional investors got subscribed 40.90 times. The qualified institutional buyers (QIBs) part is booked 143.78 times. The employee portion has been subscribed 1.90, and others portion has been subscribed 17.40 times.
Bajaj Housing Finance IPO Live Updates: Analysts decode the the impact on Bajaj Finance
Analysts expect Bajaj Finance’s standalone share of unsecured loans to rise slightly following Bajaj Housing Finance’s listing, which could result in higher credit costs. However, the higher yields and superior net interest margins (NIMs) from these loans are expected to offset the increase in credit costs, according to Avinash Singh of Emkay Global.
Post-listing, Bajaj Finance will no longer benefit from the risk diversification provided by Bajaj Housing Finance, potentially leading to marginally higher GS3/NS3 metrics for the standalone entity.
Jignesh Shial of InCred Equities noted that Bajaj Finance’s strong management, promoter support, and consistent growth quality justify its premium valuation, which is expected to apply to Bajaj Housing Finance as well. Read more here
Bajaj Housing Finance IPO Live Updates: Key Risks before applying for the IPO
Key risks for Bajaj Housing Finance include the potential inability to fully recover collateral or sums due from defaulted loans, which could impact its business, cash flows, and financial condition. Difficulty in managing Gross Non-Performing Assets (NPAs) or Stage 3 Assets, inadequate provisioning, or changes in regulatory provisioning requirements may also harm its financial health. Failure to comply with RBI regulations could have a significant negative effect on its operations.
The company’s assets are concentrated in four states and New Delhi, making it vulnerable to regional economic shifts. Additionally, its portfolio is heavily exposed to the real estate sector, so any downturns in that market could increase impairment losses. The company also faces risks related to defects in property titles used as collateral, which could affect its ability to recover loans. Read more here
Bajaj Housing Finance IPO Live Updates: Subscription status at 1:40 pm
The initial public offer of Bajaj Housing Finance IPO has been subscribed 34.07 times on the third day of subscription today, at 1:40 pm. The issue received bids for 2,337.38 crore shares as against 68.6 crore on offer.
The portion for retail investors received 6.38 times subscription while the quota for non-institutional investors got subscribed 35.10 times. The qualified institutional buyers (QIBs) part is booked 94.91 times. The employee portion has been subscribed 1.81, and others portion has been subscribed 16.16 times.
Bajaj Housing Finance IPO Live Updates: IDBI Capital recommends Subscribing
IDBI Capital stated that Bajaj Housing Finance primarily targets mortgage loans for upper-end homebuyers and large-scale developers in India. Supported by its parent, the Bajaj Group, the company boasts an extensive distribution network with 215 branches across 174 locations in 20 states as of June 30, 2024. Within just seven years of starting its mortgage operations, Bajaj Housing Finance has become the largest non-deposit-taking HFC in India by assets under management (AUM). It also maintains the highest proportion of salaried customers in its home loan portfolio among major HFCs and focuses on prime housing with higher average ticket sizes. The company reported the lowest gross non-performing asset (GNPA) and net non-performing asset (NNPA) ratios compared to its large HFC peers.
At the upper end of the IPO price band, the stock is valued at a price-to-book value (P/BV) of 3.2x, based on June 2024 figures, which is higher compared to its peers’ range of 1.2-2.7x, with a return on assets (ROA) of 2.4%. IDBI Capital recommends subscribing to the IPO for the long term.
Bajaj Housing Finance IPO Live Updates: IPO GMP at 12:40
The IPO’s grey market premium (GMP) today is ₹69.5 per share, indicating an expected listing price of ₹139.5, a premium of 99.29 percent from its issue price of ₹70. The GMP fell from ₹70 in the previous session, September 10.
Bajaj Housing Finance IPO Live Updates: Subscription status at 12:10
The initial public offer of Bajaj Housing Finance IPO has been subscribed 18.41 times on the third day of subscription today, at 12:10 pm. The issue received bids for 1,262.67 crore shares as against 68.6 crore on offer.
The portion for retail investors received 5.82 times subscription while the quota for non-institutional investors got subscribed 28.08 times. The qualified institutional buyers (QIBs) part is booked 37.93 times. The employee portion has been subscribed 1.72, and others portion has been subscribed 13.94 times.
Bajaj Housing Finance IPO Live Updates: Nirmal Bang suggests ‘subscribe’
The brokerage noted that Bajaj Housing Finance Ltd (BHFL) is well-positioned as the second-largest HFC in India, with a 31% loan compound annual growth rate (CAGR) from FY22 to Q1FY25, surpassing its peers. BHFL has consistently delivered stable return on equity (ROE), comparable to its peers despite operating in the highly competitive prime segment. The company boasts the lowest gross non-performing assets (GNPA) at 0.3% and net non-performing assets (NNPA) at 0.1% among its competitors, ensuring exceptional asset quality. While BHFL is valued at 3.2x post-IPO fund raise, aligning with peer valuations, the brokerage believes the company warrants a premium due to its superior AUM growth and asset quality. Therefore, the brokerage recommends subscribing to the IPO.
Bajaj Housing Finance IPO Live Updates: Mehta Equities recommends ‘subscribe’
The brokerage believes the Bajaj Housing Finance Ltd (BHFL) IPO offers a strong investment opportunity in one of India’s leading housing finance companies. As the second-largest HFC and eighth-largest NBFC-UL by AUM as of March 2024, BHFL’s strategic diversification and solid risk management have driven a 30.9% AUM CAGR from FY 2022 to 2024, making it the fourth fastest-growing HFC/NBFC in India.
The company’s omni-channel strategy, wide geographic reach, and focus on cross-selling have captured significant market share, particularly in Maharashtra. Its diversified borrowing strategy and strong banking relationships enhance financial stability, while revenue and profit growth have been substantial in FY 2023 and FY 2024.
With a market cap of ₹58,297 crore at the upper price band of ₹70, the issue is valued at a PBV of 2.96x, aligning with peers. Supported by the “Bajaj” brand, the brokerage recommends subscribing to the IPO for long-term growth.
Bajaj Housing Finance IPO Live Updates: Subscription status at 11:20
The initial public offer of Bajaj Housing Finance IPO has been subscribed 11:45 times on the third day of subscription today, at 11:20 IST, as per BSE data. The issue received bids for 785.48 crore shares as against 68.6 crore on offer.
The portion for retail investors received 5.58 times subscription while the quota for non-institutional investors got subscribed 25.72 times. The qualified institutional buyers (QIBs) part is booked 11.91 times. The employee portion has been subscribed 1.67, and others portion has been subscribed 13.26 times.
Bajaj Housing Finance IPO Live Updates: Subscription status at 10:33
The initial public offer of Bajaj Housing Finance IPO has been subscribed 9.61 times on the third day of subscription today, at 10:33 IST, as per BSE data. The issue received bids for 658.52 crore shares as against 68.6 crore on offer.
The portion for retail investors received 5.11 times subscription while the quota for non-institutional investors got subscribed 21.74 times. The qualified institutional buyers (QIBs) part is booked 8.75 times. The employee portion has been subscribed 1.58, and others portion has been subscribed 11.94 times.
Bajaj Housing Finance IPO Live Updates: MOSL recommends subscribe
The brokerage highlighted that Bajaj Housing Finance benefits from the strong legacy of the “Bajaj” brand, renowned for its reliability in the retail space. The company’s solid risk management framework helps maintain stable asset quality. Bajaj Housing Finance has provided guidance for a leverage ratio of approximately 6x–8x and remains optimistic about sustaining steady net interest margins (NIM) by optimizing borrowing costs. The brokerage notes that the IPO is attractively priced at three times FY25 price-to-book value (P/BV) on a diluted basis and recommends subscribing to the issue, considering these advantages.
Bajaj Housing Finance IPO Live Updates: About the company
Bajaj Housing Finance, founded in 2008, is a non-deposit-taking Housing Finance Company (HFC) that has been registered with the National Housing Bank (NHB) since 2015. The company began offering mortgage loans starting from the financial year 2018.
A part of the diversified Bajaj Group, Bajaj Housing Finance provides tailored financial solutions to individuals and corporates for purchasing and renovating homes and commercial properties. The company’s extensive mortgage product range includes home loans, loans against property (LAP), rent concessions, and developer finance.
As of March 31, 2024, Bajaj Housing Finance served 308,693 active customers, with home loan customers accounting for 81.7% of its customer base.
Bajaj Housing Finance IPO Live Updates: Here’s what GMP hints ahead of Day 3 subscription
The IPO’s grey market premium (GMP) today is ₹70 per share, indicating an expected listing price of ₹140, a premium of 100 percent from its issue price of ₹70. The GMP has been the same since the last session, September 10, but jumped from ₹64 on September 9.
‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.