After witnessing Bajaj Housing Finance phenomenal debut on the Indian stock exchanges, investors who were lucky enough to be allotted the shares were left exhilarated, eagerly crunching the numbers to calculate their remarkable profit margins.
The stock’s impressive performance saw investments soaring to new heights within minutes of its listing. Bajaj Housing Finance shares debuted on the NSE at ₹150 each, representing a staggering 114.29 per cent premium compared to their IPO price of ₹70 each.
This stellar listing of Bajaj Housing Finance shares comes on the back of strong demand for its initial public offering (IPO), which received a record amount of subscription exceeding ₹3 lakh crore from investors, compared to the IPO size of ₹6,560 crore.
Peers feel the heat
Post-listing, the shares continued to climb, reaching ₹165, a 10 per cent increase from their initial listing price. With Bajaj Housing Finance’s strong performance, peer stocks such as LIC Housing Finance, PNB Housing Finance, and Can Fin Homes have experienced declines, with losses of up to 6.2 per cent.
Analysts explain that the peer companies have weak fundamentals compare to the Bajaj Housing Finance. Prior to the listing of the Bajaj Housing shares, analysts expressed optimism about the company despite its higher valuations relative to peers. They highlighted BHFL’s strong and diversified asset under management, excellent asset quality with non-performing assets (NPAs) below 1 per cent, and a superior technology platform enabling it to remain relevant in a stiff competitive environment.
According to SBI Securities, Bajaj Housing Finance Limited ranks as the second-largest housing finance company in India with an asset under management (AUM) of ₹97,071 crore. It boasts the lowest gross and net non-performing asset (GNPA and NNPA) ratios among major housing finance companies, at 0.28 per cent and 0.11 per cent, respectively.
SBI Securities also highlighted BHFL’s impressive AUM growth of 30.9 per cent and profit growth of 56.2 per cent from FY22 to FY24. The company’s strong association with the Bajaj brand is noted as a significant factor, and a projected industry growth rate of 13 per cent to 15 per cent over the next three years positions BHFL to benefit from the expanding housing finance sector.
Bajaj Housing Finance is part of the esteemed Bajaj Group, a leading Indian conglomerate with a diverse portfolio. The group includes prominent listed entities such as Bajaj Finance, a top non-banking financial company, and Bajaj Auto, a key player in the automotive sector.
Established in 2008 and a registered non-deposit-taking housing finance company with the National Housing Bank (NHB) since 2015, Bajaj Housing Finance began offering mortgage loans in FY18. It is fully owned by Bajaj Finance, which is itself 51.34 per cent owned by Bajaj Finserv, both of which are classified as promoters of Bajaj Housing Finance.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
