Bajaj Housing Finance Shares Soar on Listing Day: 135% Premium Over IPO Price

Bajaj Housing Finance made an impressive debut in the stock market on Monday, September 16, with shares listing at ₹150 per share on both the NSE and BSE, representing a remarkable 114% premium over the initial public offering (IPO) price of ₹70 per share. By the end of the trading day, the stock closed at its upper circuit of ₹164.99, achieving a 135% premium over the IPO price. The company’s market capitalization soared to ₹1.37 lakh crore, far exceeding its expected valuation of ₹58,297 crore.

A Successful IPO and Strong Listing Gains

The company’s IPO, which raised ₹6,560 crore, was met with overwhelming demand, accumulating subscriptions worth ₹3.23 lakh crore. Bajaj Housing Finance shares were allotted to IPO subscribers on September 13 at the price of ₹70 per share. Upon listing, shares gained ₹80 each, slightly above the grey market premium (GMP) of ₹75, as noted by platforms tracking grey market activity.

With such an impressive start, Bajaj Housing Finance’s market valuation is now 2.4 times higher than the projected post-IPO market cap.

Analysts’ Views on Future Potential

Market analysts are optimistic about the company’s future, citing its robust fundamentals and the positive outlook for the housing finance sector. Narendra Solanki, Head of Equity Research (Fundamental) at Anand Rathi Shares & Stock Brokers, advises investors to hold onto the stock for long-term gains. He believes that Bajaj Housing Finance’s strong position in the housing finance market will continue to drive value for shareholders over time.

Insights from Sanjiv Bajaj

In an interview with CNBC-TV18, Sanjiv Bajaj, Chairman of Bajaj Housing Finance, commented on the market dynamics, stating that interest rate cuts have not significantly impacted demand, nor does he foresee any adverse effects on the company’s net interest margins (NIM). Bajaj emphasized that the company’s financial outlook remains stable, and the NIM is expected to hold steady despite the IPO listing.

Purpose of the IPO and Company’s Background

The IPO was conducted in compliance with the Reserve Bank of India (RBI)’s mandate that upper-layer non-banking financial companies (NBFCs) must list on stock exchanges by September 2025. The funds raised through the IPO will be used to enhance the company's capital base, enabling it to meet future growth needs and maintain its strong position in the housing finance sector.

Bajaj Housing Finance, registered with the National Housing Bank in 2015, is a non-deposit-taking housing finance company that offers a variety of mortgage products. These include home loans, loans against property, lease rental discounting, and developer financing. As an upper-layer NBFC, the company continues to play a crucial role in India's growing housing finance industry.

Conclusion: A Promising Future for Bajaj Housing Finance

With its strong market debut, Bajaj Housing Finance has not only captured investor interest but has also demonstrated the potential for sustained growth in the housing finance sector. Analysts are recommending a long-term hold on the stock, making it an attractive option for investors seeking future gains from a stable and growing company. The successful IPO and subsequent market performance signal a promising future for Bajaj Housing Finance as it continues to expand its footprint in the financial services space.