Bajaj Housing Finance listing today: What investors need to know
Bajaj Housing Finance is set to make its debut on the stock market today, following a highly successful initial public offering (IPO) that garnered subscriptions worth ₹3.23 lakh crore. The shares were allocated to successful IPO bidders early on September 13. According to the gray market premium (GMP) at the time of writing, the shares are projected to list at nearly 103% above their issue price of ₹70 per share, potentially yielding a premium of ₹72 per share.
Analysts advise long-term investment in Bajaj Housing Finance
Despite the potential for substantial listing gains, market analysts are advising a long-term investment approach to Bajaj Housing Finance. This advice is based on the company's strong fundamentals and the positive outlook for the housing finance sector. Narendra Solanki, Head of Equity Research (Fundamental) at Anand Rathi Shares & Stock Brokers, has suggested that investors hold onto their stocks for long-term return generation.
Bajaj Housing Finance's growth strategy and market capitalization
Bajaj Housing Finance intends to expand its market share by strengthening relationships with existing customers, attracting new ones, and venturing into new regions. The company's shares command a price-to-book (P/BV) multiple of 3.2x on post-issue equity, translating into a market capitalization of ₹58,297 crore at the upper price band. Solanki attributes this premium valuation to the company's rapid AUM growth, diversified product range, low credit costs, and superior asset quality.
Differing views on profit booking strategy
Rajesh Agarwal, Head Research at AUM Capital, suggests that if the listing includes a premium of nearly 150%, investors should consider taking profits. "If the price is around ₹150 or more, then book profit; if not full, then at least partial profit booking would be a prudent strategy," he told Moneycontrol. VLA Ambala, SEBI-registered Research Analyst and Co-founder of SMT, also advises market participants to book 50% of their invested capital and keep the remainder invested for long-term growth.
Bajaj Housing Finance's market performance and future prospects
Bajaj Housing Finance has shown strong fundamentals with its assets growing from ₹48,527 crore in March 2022 to ₹81,827 crore in March 2024. However, its debt also rose to ₹69,129 crore during this period. The company's profit after tax (PAT) saw a significant increase from ₹710 crore to ₹1,731 crore. Prashanth Tapse of Mehta Equities Ltd recommends conservative investors to book profits if the listing gain exceeds expectations while long-term investors should hold for future growth.
