Bajaj Housing Finance ₹6,560 Crore IPO: What Investors Should Consider Before Bidding
Bajaj Housing Finance Ltd. (BHFL) has officially opened its ₹6,560 crore initial public offering (IPO) for subscription today, September 9, 2024. This significant event in the financial market is set to run until September 11, 2024. The IPO consists of a fresh issue of ₹3,560 crore and an offer for sale (OFS) of ₹3,000 crore from its promoters, Bajaj Finance and Bajaj Finserv.
Main Points
Key Details About the IPO
Price Band and Lot Size
The price band for the IPO has been set between ₹66 and ₹70 per share. Investors can apply for a minimum of 214 shares, which translates to an application amount of approximately ₹14,980. The shares will be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) following the completion of the subscription period.
Anchor Investors
Before the IPO’s opening, Bajaj Housing Finance successfully raised ₹1,758 crore from a host of prominent anchor investors. Notable names include the Government of Singapore, JP Morgan, Morgan Stanley, and several mutual funds and insurance companies. This strong backing from institutional investors is seen as a positive indicator for the IPO’s potential success.
Market Sentiment and Analyst Recommendations
Positive Outlook
Analysts are largely optimistic about the IPO, recommending a “subscribe” rating for both short-term gains and long-term investment. The company is recognized as the second-largest housing finance company in India, boasting an asset under management (AUM) of ₹97,071 crore and a low gross non-performing asset (GNPA) ratio of just 0.28%. This strong performance is attributed to its robust risk management practices and the backing of the reputable Bajaj Group.
Grey Market Premium
The grey market premium (GMP) for Bajaj Housing Finance shares is currently around ₹56.70, suggesting a potential upside of approximately 81% above the issue price. However, it is essential to note that GMP values can fluctuate and should not be solely relied upon for investment decisions.
Company Background
Founded in 2008, Bajaj Housing Finance is a non-deposit-taking housing finance company registered with the National Housing Bank (NHB) since 2015. The company has established itself as a key player in the housing finance sector, providing a range of financial products tailored to individual and corporate clients. These products include home loans, loans against property, and developer financing.
Growth Potential
The housing finance industry is expected to grow at a rate of 13-15% over the next three years, positioning Bajaj Housing Finance to capitalize on this growth. Analysts believe that the company’s management has the vision and capability to drive further expansion in the coming years.
IPO Subscription Details
The IPO is categorized into different segments for investor participation:
- Qualified Institutional Buyers (QIBs): 50% of the offer
- Non-Institutional Investors (NIIs): 15% of the offer
- Retail Individual Investors (RIIs): 35% of the offer
Additionally, shares worth ₹200 crore are reserved for eligible employees, and ₹500 crore for eligible shareholders of Bajaj Finance and Bajaj Finserv.
Note: The information given in this article is from investment experts and brokerage companies, they do not represent Local Haryana. Before taking any investment related decision, you must consult a certified expert.
