Shares of Bajaj Housing Finance, finance service arm of Bajaj Finance, made a blockbuster debut on the stock market today, with the stock price listing at a premium of 114% over the initial public offering (IPO) price. The share of Bajaj Housing Finance debuted at ₹150 on the BSE and NSE against the issue price of ₹70 per share, with a market capitalisation of ₹1.25 lakh crore, more than double from ₹58,300 crore at the time of the issue.   

Post listing, Bajaj Housing Finance shares touched a high and low of ₹160.92 and ₹147, respectively, on the BSE, with nearly 3 crore shares changing hands over the counter.

The strong listing of Bajaj Housing Finance shares was better than Street expectations as the stock was commanding a grey market premium of ₹72 in the unlisted market, indicating listing to be around ₹142 per share.

“This blockbuster performance was widely anticipated, given the IPO's overwhelming subscription of 67.43 times and the sky-high grey market premium. The listing reflects investors' unwavering confidence in the company's robust financials, backed by the prestigious Bajaj Group,” says Shivani Nyati, Head of Wealth, Swastika Investmart Ltd.

“This successful debut is a testament to the company's strong fundamentals and the market's anticipation for its growth potential. Investors who were fortunate enough to secure allotments in the IPO may consider booking profit now, but those who want to hold their positions may do so by potentially setting a stop loss at ₹135 as a risk management strategy,” she adds.

The ₹6,560 crore issue of the Bajaj Housing Finance, which is the first public offering by Bajaj Group in 20 years, was subscribed 67.43 times on the last day of bidding today, with the IPO receiving highest-ever number of applications (88.94 lakh) and bids worth ₹3.24 lakh crore at the upper end of price band of ₹66-70 per share. This is for the first time in 16 years that any company has topped ₹2 lakh crore marks in subscription amounts after Coal India in 2008.

The IPO of Bajaj Housing Finance, which comprised a fresh issue of ₹3,560 crore and an offer for sale of ₹3,000 crore by parent Bajaj Finance, received an overwhelming response from all three categories of investors, especially from the qualified institutional buyer (QIB) as the quota reserved for them was subscribed 222.05 times. The QIB segment alone received record bids worth ₹2.6 lakh crore.

The portion set aside for non-institutional investors (NIIs) was booked 43.98 times, while the retail segment received comparatively muted bids as the quota for them was subscribed 7.41 times. The employee portion was subscribed 2.13 times. Subscription in NII category was ₹38,659 crore and that in retail category was ₹15,195 crore at upper end of price band. 

As per the DRHP filed with the SEBI, the company had reserved half of the issue for qualified institutional buyers (QIBs), 15% for non-institutional investors (NIIs), and the remaining 35% for retail investors, including reservation for employees.

The housing finance company intends to use the net proceeds from issuance of fresh equities to augment its capital base to meet future business requirements of the company towards onward lending.

Founded in 1926, the firm offers financial solutions such as home loans, loans against property, lease rental discounting, and developer financing to individuals and corporate entities to purchase and renovate homes and commercial spaces. As on March 31, 2024, it had a network of 215 branches spread across 174 locations in 20 states and three union territories, which are overseen by six centralised hubs for retail underwriting and seven centralised processing hubs for loan processing.

(DISCLAIMER: The views and opinions expressed by investment experts on fortuneindia.com are either their own or of their organisations, but not necessarily that of fortuneindia.com and its editorial team. Readers are advised to consult certified experts before taking investment decisions.)

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