Bajaj Housing Finance IPO: Issue subscribed 2.02 times on Day 1; check GMP & key details
Bajaj Housing Finance launched its much-anticipated initial public offering (IPO), aiming to raise ₹6,560 crore. The IPO opened for subscription today and has already garnered significant interest from investors, being subscribed 2.02 times on its first day. The price band for the shares is set between ₹66 and ₹70 each, and the offer will remain open until September 11, 2024.
Main Points
Overview of Bajaj Housing Finance IPO
Bajaj Housing Finance, a subsidiary of the Bajaj Group, is a non-deposit taking housing finance company registered with the National Housing Bank since 2015. The company has been providing mortgage loans since the financial year 2018 and specializes in various financial solutions for residential and commercial properties.
Subscription Details
The IPO has seen robust demand, especially from non-institutional investors, who subscribed 4.35 times their allotted shares. Retail investors showed a strong interest as well, with their portion subscribed 2.90 times. Qualified institutional buyers (QIBs) contributed to the overall subscription with a rate of 1.07 times. As of midday on the first day, the IPO had received bids for over 146.7 million shares against 72.75 million shares available, indicating a healthy appetite from the market.
Grey Market Premium (GMP)
The grey market premium (GMP) for Bajaj Housing Finance shares is currently estimated between ₹50 to ₹87.86, suggesting a potential listing gain of 70-80% over the issue price. This high GMP reflects strong investor sentiment and expectations for the stock’s performance post-listing, which is scheduled for September 16, 2024.
Financial Performance and Future Plans
Bajaj Housing Finance has demonstrated solid financial performance, reporting a net profit of ₹1,731 crore for the financial year 2023-24, which is a 38% increase from the previous year. The company’s revenue also grew significantly, reaching ₹7,618 crore, up 34% year-on-year.
The funds raised through this IPO will be used to strengthen the company’s capital base, enabling it to meet future business requirements and support onward lending activities. This strategic move is aligned with the Reserve Bank of India’s regulations, which require upper-layer non-banking finance companies (NBFCs) to be listed by September 2025.
Anchor Investors and Market Confidence
Before the IPO, Bajaj Housing Finance secured ₹1,758 crore from anchor investors, including major names like JP Morgan, Morgan Stanley, and HDFC Mutual Fund. This backing from reputable financial institutions has bolstered market confidence in the IPO, further driving demand from retail and institutional investors alike.
Expert Opinions
Several brokerage firms have recommended subscribing to the Bajaj Housing Finance IPO, citing its strong brand equity and growth potential in the housing finance sector. Analysts believe that the company’s management has the vision and capability to navigate the evolving market landscape, making it an attractive investment opportunity for both short and long-term investors.
