Bajaj Housing Finance Limited, a wholly-owned subsidiary of Bajaj Finance Limited, classified as an ‘Upper-Layer NBFC’ by the RBI, is making headlines with its much-anticipated Initial Public Offering (IPO) in September 2024. The company, headquartered in Pune, specializes in providing home loans, loans against property, and financing solutions for both individuals and corporates. This includes working capital loans and financial assistance to real estate developers for construction projects.

The IPO comprises a Book Built Issue amounting to ₹6,560 crore, which includes a Fresh Issue of 50.85 lakh shares worth ₹3,560 crore, and an Offer for Sale (OFS) of 42.85 lakh shares, totaling ₹3,000 crore. The subscription window for the Bajaj Housing Finance IPO opens from 09 September 2024 to 11 September 2024, with the allotment expected by 12 September 2024, followed by a tentative listing on the BSE and NSE on 16 September 2024.

Bajaj Housing Finance IPO Key Financials

The company's financial performance has shown a consistent upward trend. Its revenue jumped from ₹37,671.3 million in FY22 to ₹56,654.4 million in FY23, further rising to ₹76,177.1 million in FY24. Similarly, EBITDA grew from ₹31,409.3 million in FY22 to ₹49,447.8 million in FY23, reaching ₹68,935.3 million in FY24. The company's Profit After Tax (PAT) also saw a sharp rise from ₹7,096.2 million in FY22 to ₹12,578.0 million in FY23, climbing to ₹17,312.2 million in FY24.

These strong financials make the IPO attractive, especially when the company’s pre-issue EPS is ₹2.6, and its post-issue EPS stands at ₹2.07. With a pre-issue P/E ratio of 26.92x and a post-issue P/E ratio of 33.81x, compared to the industry P/E of 20.0x, Bajaj Housing Finance is priced fairly well for its growth potential.

IPO Price Band and Investment Details

The share price band is set between ₹66 to ₹70 per share. Retail investors can invest with a minimum lot size of 214 shares, requiring an investment of ₹14,980, while High-Net-Worth Individuals (HNIs) need to invest in a minimum of 14 lots (2,996 shares) amounting to ₹209,720. The IPO is being managed by a stellar team of book-running lead managers, including Kotak Mahindra Capital, BofA Securities, and Axis Capital among others, with KFin Technologies acting as the registrar.

Grey Market Premium (GMP) and Expected Gains

Although the Grey Market Premium (GMP) does not directly impact the stock price, it is a useful indicator of market sentiment. The Bajaj Housing Finance IPO GMP is expected to range between ₹25 to ₹28, suggesting potential listing gains of 35% to 40%. However, it’s essential to note that GMP is based on unregulated, informal trading and should not be relied upon for final investment decisions.

Objectives of the IPO

The Fresh Issue aims to raise capital for business growth, while the Offer for Sale allows the Promoter Selling Shareholder to realize gains from their equity holding. The company will not receive any proceeds from the Offer for Sale. Instead, these proceeds will go directly to the promoters. The fresh capital will primarily be used for expansion and enhancing capital adequacy.

Also Read : Tolins Tyres IPO: Key Details and Review of ₹230 Crore Issue

How to Check IPO Allotment Status

The allotment of Bajaj Housing Finance IPO shares will be finalized by 12 September 2024. Investors can check their allotment status through the following steps:

Visit the IPO allotment status page on the registrar’s website.

Select Bajaj Housing Finance Limited IPO from the dropdown list.

Enter the application number, PAN, or DP Client ID.

Submit the details to view your allotment.

Should You Invest?

With strong financials, attractive growth potential, and a reasonable price band, the Bajaj Housing Finance IPO offers a compelling investment opportunity. The company’s steady performance, coupled with expected listing gains, makes this IPO suitable for both short-term gains and long-term investments. Analysts are optimistic, citing the company's strong Return on Average Equity (ROAE) of 15.2% for FY24 and overall growth prospects in the housing finance sector.

Investors seeking to diversify their portfolio with a well-established non-banking financial company should consider subscribing to this IPO.

For more detailed analysis and updates on other IPOs, you can explore additional articles on our platform.

Background Content for Reference

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