At 11:09 am, the issue attracted bids for 2,17,98,61,352 shares, or 3 times against the issue size of 72,75,75,756 shares. The retail portion of the issue was subscribed 2.37 times, and the non-institutional category’s subscription rate stood at 6.82 times. The allocation for qualified institutional bidders was booked 1.08 times.
According to market analysts, Bajaj Housing Finance’s grey market premium (GMP) stands at Rs 63-64, reflecting a 90% premium over the issue price.
Ahead of the issue opening, the company has raised Rs 1,758 crore from marquee anchor investors, including JP Morgan, Morgan Stanley, Nomura, and HDFC Mutual Fund.
The company, promoted by Bajaj Finance and Bajaj Finserv, will raise around Rs 6,560 crore through the public offer, which is a combination of Rs 3,560 crore worth of fresh equity sale and an offer for sale (OFS) of Rs 3,000 crore.
Bajaj Housing Finance IPO price band
The company has fixed a price band of Rs 66-70 per share, where investors can bid for 214 shares in one lot.
Bajaj Housing Finance IPO GMP
Ahead of the issue opening, the company’s shares traded at a GMP of Rs 56, indicating a premium of 90% to the issue price at the upper end of the price band.
Bajaj Housing Finance IPO review
Analysts are in near consensus in advising investors to subscribe to the issue despite premium valuations given the strong parentage of the Bajaj group, robust market position, consistent financial performance and risk management, and growth potential in housing finance and commercial real estate space.
“Although mortgages look to be a pure vanilla product, they have multiple dimensions, especially in an emerging market like India. We believe BHFL’s management has the vision and capability to explore the same over the years, which makes the company attractive over the mid-to-long-term horizon. We recommend subscription to the IPO,” said Incred Equities.
“Significant value could get added over the next 12-15 months as 25-30% AUM/earnings growth and 14-15% RoE is likely in the next couple of years. Key strengths of BHFL are growth execution, risk management and operating efficiencies,” said YES Securities.
Other Details
Net proceeds from the public offer will be used to augment the company’s capital base to meet future business requirements of the company towards onward lending.
Bajaj Housing Finance is a non-deposit-taking HFC registered with the National Housing Bank since September 2015, offering tailored financial solutions for purchasing and renovating residential and commercial properties.
It has also been identified and categorised as an upper-layer NBFC by the RBI in India. Its comprehensive mortgage products include home loans, loans against property, lease rental discounting and developer financing.
The company primarily focuses on individual retail housing loans, supported by a diverse range of commercial and developer loans, serving customers from homebuyers to large developers.
For the fiscal year 2023-24, the housing lender posted a net profit of Rs 1,731 crore, marking a growth of 38% from Rs 1,258 crore in FY23. Net income during the same period rose 34% year-on-year to Rs 7,618 crore.
Kotak Mahindra Capital, BofA Securities, Axis Capital, Goldman Sachs (India) Securities, SBI Capital Markets, JM Financial, and IIFL Securities are the book-running lead managers to the issue.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)