Bajaj Housing Finance IPO became India’s most subscribed ever, with the total bid amount for the public issue at a whopping Rs 3.24 lakh crore topping one percent of India’s GDP. According to the NSO data, India’s nominal GDP at constant prices is estimated at Rs 295.36 lakh crore in 2023-24.
Bajaj Housing Finance’s Rs 6,560-crore initial public offering, which closed on Wednesday, 11 September, broke the previous record held by Coal India, which got a subscription worth Rs 2.36 lakh crore in 2008. Earlier this year, Premier Energies IPO received bids of over Rs 1.48 lakh crore, while Tata Technologies IPO in November 2023 got bids worth Rs 1.56 lakh crore.
Institutional investors led the charge in the IPO frenzy for Bajaj Housing Finance, with their bids exceeding 200 times the shares allocated to them. Meanwhile, the retail category was oversubscribed seven times.
Considering the huge demand for the stock, the stock has seen a further rise in the grey market premium. Currently, the stock is being traded at a premium of Rs 78 in the unlisted market, a premium of over 111 percent compared to the issue price.
Why the frenzy
The strong investor interest for Bajaj Housing Finance IPO has been driven by several factors. As the second-largest player in the housing finance sector, the company benefits from a well-diversified product suite and robust support from parent Bajaj Finance, which is expected to fuel exponential growth. It has a good quality asset base, with low exposure to risky assets and stable profitability.
The IPO pricing is set at a premium compared to most peers, reflecting its strong market position and financial stability.
Bajaj Housing Finance IPO Allotment Status Check
Amit Jain, Co-Founder, Ashika Global Family Office Services said that as a subsidiary of Bajaj Finance, it benefits from a robust brand reputation and strong backing. The company has a profitable track record, low delinquency rates, and a diverse loan portfolio, which enhances its appeal in the growing housing finance sector.
However, Jain warned that potential investors should consider risks such as rising interest rates and competitive pricing.
Bajaj Housing Finance provides mortgage loans for both retail and commercial customers, with cross-selling and up-selling opportunities. It holds a 34 percent market share in the prime home loan segment, which makes up over 57 percent of its product portfolio.
The company’s assets under management (AUM) have been growing at a CAGR (compounded annual growth rate) of 39 percent, reaching Rs 97,071 crore by the end of June 2024, the highest among its peers. The AUM growth has outperformed other housing finance companies (HFCs), helped by diverse product offerings and strong brand recognition.
Salaried customers and large home loans make up a significant portion of its loan book. The company is closely connected with its parent firm and has raised significant capital in the past to support its faster growth.
Bajaj Housing Finance shares are likely to be allotted today to bidders, while listing will take place on Monday, 16th September.
Recently, IPOs have seen strong interest. In August, mainboard IPOs were subscribed more than 75 times on average, while the year-to-date average for 2024 stands at 66 times. For SME IPOs, the average subscription in August hit 290 times, with the year-to-date average over 259 times, according to the data.
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