Bajaj Housing Finance IPO set to launch on Monday
Bajaj Housing Finance Limited (BHFL) is set to launch its initial public offering (IPO) on September 9, marking the largest IPO of 2024. The offer will be available for bidding until September 11. Following the 'T+3' listing rule, allotment is expected on September 12, with a probable listing date of September 16. The price band for the BHFL IPO has been fixed at ₹66-₹70 per equity share, with a mix of fresh stocks and offers for sale (OFS).
Aim to raise ₹6,560 crore through IPO
BHFL aims to raise a total of ₹6,560 crore from this IPO. The company has allocated ₹3,000 crore for the OFS and plans to use the remaining ₹3,560 crore for issuing fresh shares. Shareholders of Bajaj Finance or Bajaj Finserv as on the BHFL IPO RHP filing date, are eligible to apply under the BHFL IPO shareholder quota.
Shares witness premium in gray market
BHFL shares are currently trading at a premium of ₹55 in the gray market, up from ₹42 prior to the RHP filing. This represents a significant increase of approximately 79% above the upper price band of the BHFL IPO. The record date for eligibility under the shareholders' quota was August 31, applicable to those who held shares in parent companies Bajaj Finance or Bajaj Finserv after August 30's session end.
IPO performance and future prospects
InCred Equities has noted that while BHFL's shares are priced higher than competitors like LIC Housing Finance (1.2x), PNB Housing (1.7x), and Can Fin Homes (2.7x), this aligns with expectations due to BHFL's strong AUM growth (+30% CAGR), solid asset quality (NPAs less than 1%), and advanced technology platform. At the upper price band of ₹70 per equity share, BHFL shares were available at 3.2 times their June 2024 book value, post dilution and adjusting for rights share allocation.
Objective is to comply with RBI mandate
The primary objective of this IPO is to comply with an RBI mandate, that requires top NBFCs to list on stock markets within three years of receiving "upper layer" status.
