Stock Reaches Circuit Limit on Day One

Bajaj Housing Finance experienced a dramatic surge in its share price on September 17, 2024, hitting the upper circuit limit of Rs 181.5, a gain of up to 10% from its issue price. The stock later settled slightly below this peak, trading at Rs 178, marking an 8% increase. On its listing day, Bajaj Housing Finance closed at Rs 165, reflecting an impressive 135% gain from its IPO price of Rs 70.

Phillip Capital Issues Buy Rating

Phillip Capital has initiated coverage on Bajaj Housing Finance with a ‘Buy’ rating and a target price of Rs 210, indicating a potential upside of 27%. The brokerage praised the company’s strong positioning in the Rs 50 lakh home loan segment, which represents 65% of India’s home loan market. Phillip Capital projects that Bajaj Housing Finance’s balance sheet will exceed Rs 2 lakh crore within three years and anticipates stable near-term credit costs to support growth.

IPO Breaks Records

The Bajaj Housing Finance IPO, which raised Rs 6,560 crore, garnered an unprecedented Rs 3 lakh crore in bids, making it India’s largest-ever subscription. Analysts recommend holding the stock for long-term benefits due to its solid fundamentals. For those who missed the IPO, cautious long-term investment is advised.

IPO Structure and Regulatory Compliance

The IPO comprised a fresh equity issue of Rs 3,560 crore and an offer-for-sale (OFS) of Rs 3,000 crore by the parent company, Bajaj Finance. This move aligns with Reserve Bank of India (RBI) regulations requiring upper-layer non-banking finance companies to be listed by September 2025. Post-listing, Bajaj Housing Finance’s market capitalization soared to Rs 1.37 lakh crore, nearly 2.4 times the estimated valuation of Rs 58,297 crore at the IPO price.