Bajaj Housing Finance IPO: Date, Lot Size & GMP Details

The Bajaj Housing Finance IPO is set to open for subscription from September 9 to September 11, 2024. The price band has been fixed at ₹66 to ₹70 per share, with a lot size of 214 shares. This highly anticipated initial public offering aims to raise approximately ₹7,000 crore through a combination of fresh issue and offer for sale.

Also Read-Bajaj Housing Finance IPO Opening on September 9: Everything You Need to Know

Bajaj Housing Finance Limited, a subsidiary of Bajaj Finance, is one of India’s fastest-growing housing finance companies. Established in 2015, the company has quickly become a significant player in the mortgage lending sector, offering a diverse range of products including home loans, loans against property, and developer financing.

Key IPO Details.

Company Overview.

Bajaj Housing Finance Limited has established itself as a prominent player in the Indian housing finance sector. The company’s focus on low-risk salaried borrowers and its strong track record of profitability have contributed to its rapid growth. As of March 31, 2024, Bajaj Housing Finance’s assets under management (AUM) stood at an impressive ₹913,704.0 million, showcasing a compound annual growth rate (CAGR) of 30.9% from Fiscal 2022 to 2024.

IPO Objectives.

The primary objectives of the Bajaj Housing Finance IPO are:

1. To augment the company’s capital base for future business requirements
2. To meet regulatory capital adequacy norms
3. To enhance the company’s visibility and brand image

Grey Market Premium (GMP).

The Grey Market Premium (GMP) for Bajaj Housing Finance IPO has been generating significant interest among investors. As of the latest reports, the GMP stands at ₹56, indicating a premium of 80% over the upper end of the price band. This strong GMP suggests high investor confidence and potential for listing gains.

Subscription Status.

The Bajaj Housing Finance IPO has witnessed strong demand on its opening day. As of 2:00 PM on the first day of subscription, the issue was oversubscribed 2 times. The non-institutional investors’ portion saw the highest demand at 2.28 times, followed by retail investors at 0.97 times. The qualified institutional buyers’ segment, however, saw a subscription of only 29,71,176 shares out of the 17.76 crore reserved for them.

Financial Performance.

Bajaj Housing Finance has demonstrated robust financial performance over the years:

• Net profit for FY 2023-24: ₹1,731 crore (38% YoY growth)
• Net income for FY 2023-24: ₹7,618 crore (34% YoY growth)
• Assets Under Management (AUM) as of March 31, 2024: ₹913,704.0 million
• CAGR of AUM from Fiscal 2022 to 2024: 30.9%

Industry Outlook.

The Indian housing finance sector presents significant growth opportunities:

• Total housing loans in India reached ₹28.73 trillion by March 2023
• Projected housing shortage of 100 million units indicates substantial market potential
• Prime housing finance market grew to ₹9.3 trillion by Fiscal 2023, with a CAGR of 19.5% from 2019

Strengths and Competitive Advantages.

1. Strong parentage of the Bajaj Group
2. Diverse range of mortgage products
3. Focus on low-risk salaried borrowers
4. Highest credit ratings for borrowing in India
5. Lowest delinquency rates among large housing finance companies
6. Extensive branch network across 20 states and 3 union territories

Risks and Challenges.

1. Intense competition in the housing finance sector
2. Regulatory changes affecting the industry
3. Economic slowdowns impacting housing demand
4. Interest rate fluctuations affecting borrowing costs

Expert Opinions.

Analysts are largely positive about the Bajaj Housing Finance IPO, citing the company’s strong parentage, robust market position, and growth potential in the housing finance sector. Incred Equities recommends subscription to the IPO, stating, “We believe BHFL’s management has the vision and capability to explore the same over the years, which makes the company attractive over the mid-to-long-term horizon.”

YES Securities also expresses optimism, noting, “Significant value could get added over the next 12-15 months as 25-30% AUM/Earnings growth and 14-15% RoE is likely in the next couple of years. Key strengths of BHFL are growth execution, risk management and operating efficiencies.”

How to Apply for the IPO.

Investors can apply for the Bajaj Housing Finance IPO through the following steps:

1. Log in to your demat account
2. Select the IPO in the current offerings section
3. Enter the number of lots and price at which you wish to apply
4. Enter your UPI ID and submit the application
5. Approve the mandate request on your UPI app to block the funds

Conclusion.

The Bajaj Housing Finance IPO presents an attractive opportunity for investors looking to gain exposure to the rapidly growing Indian housing finance sector. With its strong parentage, robust financial performance, and positive industry outlook, the company is well-positioned for future growth. However, as with any investment, potential investors should carefully consider the risks and their own financial goals before making a decision.

FAQs.

1. What is the price band for Bajaj Housing Finance IPO?
   The price band is set at ₹66 to ₹70 per share.
2. When does the IPO open for subscription?
   The IPO opens on September 9, 2024, and closes on September 11, 2024.
3. What is the lot size for the IPO?
   The lot size is 214 shares.
4. When is the expected listing date for Bajaj Housing Finance shares?
   The tentative listing date is September 16, 2024.
5. What is the current Grey Market Premium (GMP) for the IPO?
   As per the latest reports, the GMP stands at ₹56, indicating a premium of 80% over the upper price band.
6. Who are the lead managers for the Bajaj Housing Finance IPO?
   The lead managers include Kotak Mahindra Capital, BofA Securities, Axis Capital, Goldman Sachs, SBI Capital Markets, JM Financial, and IIFL Securities.
7. What will be the use of proceeds from the IPO?
   The proceeds will be used to augment the company’s capital base for future business requirements and to meet regulatory capital adequacy norms.
8. How has Bajaj Housing Finance’s financial performance been in recent years?
   The company reported a net profit of ₹1,731 crore for FY 2023-24, marking a 38% YoY growth, and its AUM stood at ₹913,704.0 million as of March 31, 2024.
9. What are the key strengths of Bajaj Housing Finance?
   Key strengths include strong parentage, diverse product range, focus on low-risk borrowers, high credit ratings, and low delinquency rates.
10. Is the Bajaj Housing Finance IPO recommended by analysts?
    Many analysts have recommended subscribing to the IPO, citing the company’s strong market position and growth potential in the housing finance sector.

Disclaimer

This article is for informational purposes only and does not constitute financial advice. The information provided is based on current data and market conditions, which are subject to change. Investing in IPOs carries risks, and readers should conduct their own research and consult with financial advisors before making investment decisions. The author and publisher are not responsible for any financial losses incurred based on the information provided in this article.

C.K. Gupta

Hello, I am C.K. Gupta Founder of Taxgst.in, a seasoned finance professional with a Master of Commerce degree and over 20 years of experience in accounting and finance. My extensive career has been dedicated to mastering the intricacies of financial management, tax consultancy, and strategic planning. Throughout my professional journey, I have honed my skills in financial analysis, tax planning, and compliance, ensuring that all practices adhere to the latest financial regulations. My expertise also extends to auditing, where I focus on maintaining accuracy and integrity in financial reporting. I am passionate about using my knowledge to provide insightful and reliable financial advice, helping businesses optimize their financial strategies and achieve their economic goals. At Taxgst.in, I aim to share valuable insights that assist our readers in navigating the complex world of taxes and finance with ease.