Bajaj Housing Finance shares hit 10% upper circuit, post-IPO gains at 159%; brokerage says ‘buy’, check target price

Bajaj Housing Finance will likely have a balance sheet exceeding Rs 2 lakh crore in next 3 years, said PhillipCapital.

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Bajaj Housing Finance share price shot up as much as 10 percent on Tuesday, September 17, hitting the upper circuit at Rs 181.5, continuing the momentum after a blockbuster IPO debut. Bajaj Housing Finance stock, which had already closed at Rs 165 on listing day -- up 135 percent from its IPO price of Rs 70 -- got its first 'buy' rating today from Phillip Capital. The firm set a target price of Rs 210, signalling a potential 27 percent upside.

Phillip Capital sees strong prospects for Bajaj Housing, highlighting its focus on the sweet spot of the Rs 50 lakh home loan segment, which accounts for 65 percent of India's home loan market. In three years, the brokerage expects the balance sheet to be north of Rs 2 lakh crore. Near-term credit costs are expected to remain benign, further supporting the company's growth outlook.

Also read | Missed Bajaj Housing Finance IPO lottery? Check if you should buy now or not

The IPO, which raised Rs 6,560 crore, garnered a record Rs 3 lakh crore in bids, making it India’s largest-ever subscription.

Analysts are advising investors to hold onto their shares for long-term gains, citing the company’s strong fundamentals. For those who missed the IPO, cautious buying is recommended with a long-term perspective.

“Investors choosing to add the stock on listing day should have a long-term perspective on Bajaj Housing Finance stock and should not look for short-term opportunities,” said Narendra Solanki, Head of Equity Research (Fundamental) at Anand Rathi Shares & Stock Brokers.

The Bajaj Housing Finance IPO consisted of a fresh issue of equity shares amounting to Rs 3,560 crore and an offer-for-sale (OFS) of equity shares worth Rs 3,000 crore by parent company Bajaj Finance.

Also read | Bajaj Housing Finance shares end listing day at upper circuit; m-cap near Rs 1.4 lakh crore

The share sale was conducted to comply with the Reserve Bank of India’s (RBI) regulations, which mandate that upper-layer non-banking finance companies must be listed on stock exchanges by September 2025.

With the listing day gain and closing price, Bajaj Housing Finance’s market capitalisation reached Rs 1.37 lakh crore, nearly 2.4 times the estimated Rs 58,297 crore at the IPO allotment price.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.