Bajaj Housing Finance Enters Trillion-Club After Blockbuster Listing

Bajaj Housing Finance Ltd. joined the Rs 1-trillion club following its listing on the stock exchanges on Monday. At the close of market hours, the company's market capitalisation was Rs 1,37,414 crore, according to data from the National Stock Exchange.

The shares were listed at Rs 150 each on the NSE, a 114% premium from the issue price. The stock rose further, hitting the 10% upper circuit during trading.

Bajaj Housing Finance ended the day's trade with a 10% gain at Rs 165 per share, while the benchmark Nifty 50 increased by 0.16%.

The company launched its initial public offering to raise up to Rs 6,560 crore. This included a fresh issue of equity shares worth Rs 3,560 crore and an offer for sale of Rs 3,000 crore by its owner, Bajaj Finance Ltd.

According to Bajaj Housing Finance's top executives, the company will continue to grow consistently, given the steady growth in the housing finance industry, aided by tailwinds of economic growth.

The NBFC expects steady credit growth of 12-15% in the housing industry, Sanjiv Bajaj, managing director of Bajaj Finserv Ltd., told reporters after the listing event. "The economy is showing very strong tailwinds and that's what gives us the comfort."

Shareholders should expect a business that grows with high quality and a high level of corporate governance, Bajaj added. "Affordable housing demand is going to be stronger in the coming years."

The IPO of the non-banking financial company was subscribed 63.61 times on the final day, driven by institutional investors whose bids exceeded 200 times the shares allocated to them.

Following the IPO, Bajaj Housing Finance is no longer a wholly-owned subsidiary of Bajaj Finance. The offer reduced the parent company's stake to 88.75%, with Bajaj Finance receiving Rs 2,999 crore from the share transfer.

While Bajaj Housing Finance saw a strong listing on the exchanges, analysts do not expect the momentum to continue for an extended period.

"As we look ahead, the business is set for strong performance, driven by growth in assets under management and profitability. However, given the current valuation, the stock may underperform in the medium term," said Asutosh K Mishra, head of research for institutional equity at Ashika Stock Broking Ltd.

"That said, the low float in the market right now may provide support for the current valuation in the short term," Mishra added.

"Considering the company's standing in India's mortgage market, the stock has long-term prospects. But given the kind of return the shares have given after the listing, investors may book some short-term profit," said Kranthi Bathini, director - equity strategy at WealthMills Securities Pvt.

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