Investors are eagerly looking forward to significant listing gains from the Bajaj Housing Finance IPO, as reflected in the impressive grey market premium (GMP) associated with the company.
To summarize briefly
- The subscription period for the begins today
- GMP experiences significant growth on its initial public offering debut
- The public offering will conclude on September 11, 2024
Today marks the launch of Bajaj Housing Finance’s impressive IPO, valued at Rs 6,560 crore, inviting the public to subscribe. The shares are priced attractively within a range of Rs 66 to Rs 70 each.
Investors are eagerly looking forward to significant listing gains, as reflected by the company’s grey market premium (GMP), which is currently between Rs 55-57 per share. This indicates a potential premium exceeding 80%. Don’t miss out; the IPO will close on September 11.
The funds raised from this public offering will be allocated to bolster Bajaj Housing Finance’s capital foundation, enabling the company to effectively address its future business requirements.
Supported by the Bajaj Group, the company offers an extensive array of mortgage solutions, such as home loans, lease rental discounting, and financing for developers.
Bajaj Housing Finance, recognized as India’s leading non-deposit-taking housing finance company, achieved an impressive net profit of Rs 1,731 crore for FY24, reflecting a remarkable 38% increase compared to the previous year.
For the first time in 31 years, Bajaj Group is coming up with an IPO.
Will Bajaj Housing Finance be a multi-bagger like Bajaj Finance?
We will check the company’s fundamentals.
And also explore the concerns around its high valuations.
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Current grey market trends indicate that Bajaj Housing Finance shares are trading at a premium of Rs 55-57 each, suggesting a remarkable potential increase of more than 80% compared to the issue price.
The grey market premium indicates that investors are anticipating a robust launch on the stock exchanges. Nevertheless, it’s crucial to understand that GMPs are inherently speculative and subject to change, serving merely as a gauge of sentiment in the unlisted market.
Important milestones: Schedule for allotment and listing
Mark your calendars for the upcoming IPO!
The opening date is set for September 9, 2024, and it will close just two days later on September 11, 2024.
The basis of allotment will be announced on September 14, 2024, followed by refunds being initiated on September 15, 2024.
Investors can expect their shares to be credited to their Demat accounts on September 16, 2024, which is also the date when the shares will officially be listed. Don’t miss this opportunity!
Perspective of the Brokerage
Several brokerages are feeling hopeful about the upcoming IPO.
Emkay Global emphasized the robust lineage of the company, its top-tier credit rating, and its exceptional management team, asserting that these elements strategically place Bajaj Housing Finance at a competitive advantage in the housing finance sector.
SBI Securities highlighted the company’s opportunity to leverage anticipated expansion in the housing finance sector, forecasting a growth rate of 13-15% in this industry over the next three years.
Anand Rathi Research highlighted that the anticipated Rs 70 billion fundraising by Bajaj Housing Finance could serve as a significant catalyst for a re-evaluation of Bajaj Finance’s market position. The brokerage projects a valuation range of Rs 560 billion to Rs 590 billion for Bajaj Housing Finance, emphasizing that the standalone operations of Bajaj Finance achieve superior return on equity (RoE) and return on assets (RoA) compared to its housing finance division, which justifies its premium valuations.
The public offering is a strategic move for Bajaj Housing Finance, enabling it to meet the Reserve Bank of India’s mandate that upper-layer NBFCs must be listed by September 2025. With robust brand recognition supported by the Bajaj Group, the company is poised to continue its impressive growth path.
Critical vulnerabilities
Although the future appears bright, brokerages have warned about possible risks, such as regulatory shifts and key-man vulnerabilities, that could affect the company’s performance down the line.
The shares from the IPO are anticipated to begin trading on stock exchanges starting September 16.
The insights, opinions, and recommendations provided by the experts and brokerages in this article are solely their own and do not represent the views of the India Today Group. It is highly recommended to seek advice from a qualified broker or financial advisor prior to making any investment or trading decisions.