Bajaj Housing Finance shares debut at 114% premium
Bajaj Housing Finance made a robust entry into the stock markets today, with its shares debuting at a 114% premium over the initial public offering (IPO) issue price. The shares listed at ₹150 apiece on BSE, a premium of 114.29% to the issue price of ₹70 per share. This strong market performance exceeds the stock's gray market premium (GMP), which was trading at ₹72 on September 16 morning, according to platforms tracking gray market activity.
IPO garnered overwhelming response
The ₹6,560-crore IPO of Bajaj Housing Finance received an overwhelming response last week, with subscriptions totaling ₹3.23 lakh crore. Successful IPO bidders were allotted shares on September 13 at an issue price of ₹70 per share. The company's strong fundamentals and the positive outlook for the housing finance sector are believed to be key drivers behind this enthusiastic market reception. At the time of writing, the Bajaj Housing Finance shares were trading at ₹158.13, up 125%.
Analysts recommend long-term investment
Narendra Solanki, Head of Equity Research (Fundamental) at Anand Rathi Shares & Stock Brokers, advises investors to retain their shares for long-term gains. This recommendation is based on the company's strong fundamentals and the positive outlook for the housing finance sector. The IPO was conducted in compliance with RBI regulations, which mandate upper-layer non-banking finance companies to list on stock exchanges by September 2025.
Bajaj Housing Finance's business model and future prospects
Bajaj Housing Finance, established in September 2015, is a non-deposit-taking housing finance company offering financial solutions for purchasing and renovating residential and commercial properties. The firm provides a range of mortgage products including home loans, loans against property, lease rental discounting, and developer financing. Funds raised from the IPO will be used to bolster the company's capital base for future needs.
Bajaj Housing Finance's market capitalization and growth potential
Bajaj Housing Finance shares command a price-to-book (P/BV) multiple of 3.2x on post-issue equity, translating to a market capitalization of ₹58,297 crore at the upper price band. Solanki notes that this premium valuation is justified by the company's accelerated AUM growth, diversified product portfolio, lower credit costs, and superior asset quality. He also highlights the company's potential to benefit from increasing mortgage penetration in India.
