Bajaj Housing Finance IPO Review

Classified as an ‘Upper-Layer NBFC’ by the RBI pursuant to Scale Based Regulations, Bajaj Housing Finance Limited (BHFL) is a 100% subsidiary of Bajaj Finance Limited — one of the most diversified NBFCs in the Indian market, catering to more than 88.11 million customers across the country. Headquartered in Pune, BHFL offers finance to individuals as well as corporate entities for the purchase and renovation of homes, or commercial spaces. It also provides loans against property for business or personal needs as well as working capital for business expansion purposes. BHFL also offers finance to developers engaged in the construction of residential and commercial properties as well as lease rental discounting to developers and high-net-worth individuals.

Financially, Bajaj House Finance revenue increased from ₹37,671.3 Millions in FY22 to ₹56,654.4 Millions in FY23 and currently jumped to ₹76,177.1 Millions in FY24. Similarly, EBITDA increased from ₹31,409.3 Millions in FY22 to ₹49,447.8 Millions in FY23 and currently jumped to ₹68,935.3 Millions in FY24. The PAT also increased from ₹7,096.2 Millions in FY22 to ₹12,578.0 Millions in FY23 and currently at ₹17,312.2 Millions in FY24. This indicates a steady financial performance.

For the Bajaj House Finance IPO, the company is issuing shares at a pre-issue EPS of ₹2.6 and a post-issue EPS of ₹2.07. The pre-issue P/E ratio is 26.92x, while the post-issue P/E ratio is 33.81x against Industry P/E ratio is 20.0x. The company's ROAE for FY24 is 15.2%. These metrics suggest that the IPO is fairly priced.

The Grey Market Premium (GMP) of Bajaj House Finance potential listing gains of 90% - 95%. Given the company's financial performance and the valuation of the IPO, we recommend Investors to Apply to the Bajaj House Finance Limited IPO for Listing gain or long term investment purposes.