Bajaj Housing Finance IPO expected to have a strong listing on Dalal Street

Shares of Bajaj Housing Finance are poised to make their debut on Dalal Street today, September 16. The initial public offering (IPO), which garnered historic interest from investors during its three-day bidding process, has sparked significant discussion regarding its potential to deliver multibagger returns. However, recent fluctuations in its grey market premium (GMP) have raised questions about its initial listing.

Grey market premium remains strong ahead of listing

The shares were initially commanding a GMP of Rs 73-75 per share, indicating a potential listing gain of 104-105 per cent for investors. This premium had dipped from a previous high of Rs 84 per share, reflecting the volatility and changing investor sentiments as the listing date approached.

Bajaj Housing Finance's IPO opened for bidding from September 9 to 11, offering shares within a price range of Rs 66-70 each and a lot size of 214 shares. The company successfully raised an impressive Rs 6,560 crore through this primary offering, which included a fresh share sale of Rs 3,560 crore and an offer-for-sale (OFS) amounting to Rs 3,000 crore from Bajaj Finance.

Issue witnessed overwhelming interest for investors

During its bidding process, the issue received overwhelming support, being oversubscribed 63.61 times overall. Qualified institutional buyers (QIBs) particularly showed a strong response, with their quota being subscribed an extraordinary 209.36 times. The non-institutional and retail investor categories also saw substantial interest, with subscriptions of 41.51 times and 7.04 times respectively.

Notably, Bajaj Housing Finance secured its position as the first Indian IPO to attract bids worth an astounding Rs 3 lakh crore, with total bids hitting around Rs 3.24 lakh crore for the offered shares. This reflects significant investor confidence in the company amidst the competitive landscape of the housing finance sector.

History of Bajaj Housing Finance and Future Potential

Incorporated in 2008, Bajaj Housing Finance has built a reputation as a non-deposit-taking housing finance company (HFC) under the aegis of the National Housing Bank (NHB). The company has been operative in providing mortgage loans since the financial year 2018 and is part of the well-established Bajaj Group, known for its diversified interests across various sectors.

While brokerages remain mostly positive about the IPO, suggesting that investors consider long-term investments based on the company’s solid foundation, a key concern persists. Analysts caution that asset concentration and exposure to real estate could pose risks to investors in the long run. Hence, aspiring investors are suggested to consult SEBI-registered investment professionals before making investment decisions in security markets. Investments in security markets come along with risks of capital depreciation.

The offering was managed by notable book-running lead managers, including BofA Securities India, Axis Capital, and Goldman Sachs (India) Securities, among others. As Bajaj Housing Finance's shares are set to begin trading on both BSE and NSE, investors and market followers alike will be keenly observing how this much-anticipated listing unfolds.