Bajaj Twins Fall 3% Amid Bajaj Housing Finance Listing – What Investors Should Know
Bajaj Housing Finance made their much-anticipated debut on the stock market, but the excitement was tempered by a decline in the shares of its parent companies, Bajaj Finance and Bajaj Finserv. Both stocks fell by up to 3% in response to the listing, despite the strong performance of Bajaj Housing Finance itself.
The initial public offering (IPO) of Bajaj Housing Finance was a resounding success, raising ₹6,560 crore and attracting an unprecedented level of interest from investors. The IPO received bids worth ₹3.24 lakh crore, marking an overall subscription rate of nearly 64 times the shares on offer. Qualified institutional buyers were particularly enthusiastic, bidding 209 times the available shares, while non-institutional investors and retail investors subscribed at rates of 41 times and 7 times, respectively.
Market Reaction to Listing
Upon its listing, Bajaj Housing Finance shares opened at ₹150, which was a remarkable 114% premium over the IPO price of ₹70 per share. This strong opening reflected the high expectations investors had for the company. However, as the day progressed, shares of Bajaj Finance fell by approximately 3.3%, while Bajaj Finserv experienced a drop of about 3%.
Despite this decline, analysts maintain a positive outlook on the long-term potential of both Bajaj Housing Finance and its parent companies. The listing is seen as a significant milestone for the Bajaj Group, which has a reputation for creating wealth for its shareholders. In fact, analysts have suggested that the successful debut of Bajaj Housing Finance could lead to a re-rating of other housing finance companies in India.
Performance Metrics
As of now, Bajaj Finserv’s stock is trading lower than its recent highs but remains above key moving averages such as the 5-day and 20-day averages. The stock hit a 52-week high earlier in the day at ₹1920.85 before closing lower. Meanwhile, Bajaj Finance’s stock also showed resilience by trading above its moving averages despite the day’s losses.
The overall market sentiment appears to be mixed. While there is optimism surrounding the new entrant in the housing finance sector, profit-taking seems to have influenced the share prices of established players like Bajaj Finance and Bajaj Finserv.
Future Prospects
Bajaj Housing Finance aims to utilize the funds raised from its IPO to enhance its business operations and expand its lending capabilities. The company has been providing mortgage loans since 2018 and serves over 76.5 million customers across India. The strong demand for housing finance products positions it well for future growth.
Analysts predict that the valuation of Bajaj Housing Finance could reach up to 2.6 times its projected book value for fiscal year 2026. This optimistic forecast is based on its robust business model and market positioning within the housing finance sector.
Investor Sentiment
Investor sentiment remains cautiously optimistic as they digest the implications of this listing on their portfolios. Many are closely monitoring how Bajaj Housing Finance will perform in subsequent trading sessions and whether it can sustain its initial momentum.
The grey market premium (GMP) prior to listing indicated strong investor enthusiasm, with shares trading at a premium of ₹75 per share before going public. This enthusiasm reflects a broader trend among investors seeking exposure to high-growth sectors like housing finance.
