Bajaj Housing Finance IPO: A Multibagger Debut and the Future of Indian IPOs
Bajaj Housing Finance made a remarkable entry into the stock market on Monday, doubling its share price upon listing. The company’s shares were listed at ₹150 on the Bombay Stock Exchange (BSE), which is a premium of 114.29% to the issue price of ₹70 per share. This impressive debut was mirrored on the National Stock Exchange (NSE), where the shares also started trading at ₹150 per share. The high interest in Bajaj Housing Finance’s Initial Public Offering (IPO) indicated the potential for multibagger returns, a term used to describe stocks that can multiply in value several times over. Analysts had anticipated a strong debut, and the actual listing did not disappoint, reinforcing their positive outlook.
The overwhelming response to Bajaj Housing Finance’s IPO was evident from the record amount of subscription it received, exceeding ₹3 lakh crore. Bidding for the IPO began on September 9 and ended on September 11, with the allotment finalized on September 12. The IPO price band was set between ₹66 to ₹70 per share, allowing the company to raise ₹6,560 crore from the issue. This fundraising effort included a fresh issue of 50.86 crore equity shares worth ₹3,560 crore and an offer-for-sale (OFS) component of 42.86 crore shares worth ₹3,000 crore. The book running lead managers for the IPO were Kotak Mahindra Capital Company Ltd, Axis Capital, BOFA Securities India Ltd, Goldman Sachs (India) Securities, JM Financial, SBI Capital Markets, and IIFL Securities, with Kfin Technologies serving as the IPO registrar.
Bajaj Housing Finance Ltd. is the largest non-deposit-taking housing finance company (HFC) promoted by Bajaj Finance Ltd. The company has been engaged in mortgage lending since the financial year 2018 and boasts an asset under management (AUM) of ₹97,071 crore. Impressively, Bajaj Housing Finance’s AUM has grown at a compound annual growth rate (CAGR) of 30.9% between FY22 and FY24. Analysts believe that the company is well-positioned to capitalize on industry demand and deliver impressive growth in the future. They recommend that investors hold onto their allotted Bajaj Housing Finance shares for a medium to long-term horizon, although it is always advised to consult with certified experts before making any investment decisions.
The success of Bajaj Housing Finance’s IPO is a testament to the company’s potential and growth prospects. Investors should keep a close eye on the company’s future performance and seek expert advice for any investment decisions. This sentiment is echoed by individual analysts and broking companies, who view the successful listing as a positive indicator of the company’s future trajectory. However, it is important to note that the views and recommendations in this article are those of individual analysts or broking companies and not of Mint, the publication reporting the news.
The Indian IPO landscape remained active this week, with a series of initial public offerings catching investors’ attention. There were five mainline IPOs and twelve SME IPOs available for investment, showcasing the diverse opportunities in the market. Shares of Gala Precision Engineering and Shree Tirupati Balajee made their market debut within the mainline group, while Bajaj Housing Finance’s IPO stood out with an overwhelming response. The company received 8.9 million applications, breaking the previous record held by Tata Technologies. The total bids for the ₹6,560 crore offering exceeded ₹3.2 trillion, highlighting the strong investor interest in the company.
The upcoming week holds further opportunities for investors, with the IPOs of Arkade Developers and Northern Arc Capital on the horizon. Debuts are also expected for Bajaj Housing Finance, Kross, and Tolins Tyres on Monday, September 16, 2024. Additionally, P.N. Gadgil Jewellers will list on the exchanges on Tuesday, September 17, 2024. Western Carriers (India) is currently open for subscription and will close on Wednesday, September 18, 2024. The allotment for Western Carriers will be finalized on Thursday, September 19, 2024, and trading will begin on Friday, September 20, 2024. The mainboard IPO of Arkade Developers opens on Monday, September 16, 2024, and closes on Thursday, September 19, 2024.
Arkade Developers’ IPO will offer 32,031,250 shares with a face value of ₹10 each, seeking to raise ₹410 crore. The minimum bid is 110 shares, and the minimum amount for retail investors is ₹14,080. The basis for allotment is scheduled for Friday, September 20, 2024, and trading will begin on Tuesday, September 24, 2024. Northern Arc Capital’s IPO will open for subscription on Monday, September 16, 2024, and close on Thursday, September 19, 2024. The company seeks to raise ₹777 crore through a fresh issue of 19,011,407 shares and an offer for sale of 10,532,320 shares. The IPO will be available at a price band of ₹249-263 with a lot size of 57 shares. The basis for allotment is scheduled for Friday, September 20, 2024, and trading will begin on Monday, September 23, 2024.
In addition to the mainline IPOs, ten SME IPOs are expected to list next week, including Excellent Wires and Packaging, Trafiksol ITS Technologies, SPP Polymers, and Gajanand International. Ongoing IPOs such as Popular Foundations, Deccan Transcon Leasing, Envirotech Systems, and Sodhani Academy of Fintech Enablers will conclude their subscription period, with five new SME IPOs also opening for investment. The vibrant activity in the IPO market reflects the growing confidence of investors in the Indian economy and the potential for significant returns from these offerings.
The success of Bajaj Housing Finance’s IPO and the upcoming listings underscore the dynamism of the Indian IPO market. Companies across various sectors are tapping into the capital markets to fuel their growth ambitions, providing investors with a plethora of opportunities to diversify their portfolios. The robust participation of retail and institutional investors in these IPOs is a testament to the confidence in the underlying fundamentals of the Indian economy. As more companies go public, the breadth and depth of the market are expected to increase, offering a wider array of investment options for market participants.
For investors, the key to navigating the IPO market lies in thorough research and due diligence. Understanding the business model, financial health, and growth prospects of the company is crucial before making any investment decision. Consulting with financial advisors and staying updated with market trends can help investors make informed choices. While the allure of quick gains from IPOs can be tempting, it is essential to have a long-term perspective and be prepared for the inherent volatility associated with stock market investments.
The IPO journey of Bajaj Housing Finance serves as a case study for other companies planning to go public. The company’s strategic approach, coupled with strong fundamentals, played a pivotal role in its successful market debut. By setting a realistic price band and ensuring robust investor communication, Bajaj Housing Finance managed to attract significant interest from both retail and institutional investors. The record-breaking subscription numbers and stellar listing performance are a testament to the company’s credibility and growth potential.
Looking ahead, the Indian IPO market is poised for continued growth, driven by a favorable economic environment and supportive regulatory framework. The government’s focus on infrastructure development, digital transformation, and financial inclusion is expected to create new opportunities for companies across various sectors. As more businesses seek to leverage the capital markets for expansion, the IPO pipeline is likely to remain robust, offering investors a steady stream of investment opportunities.
In conclusion, Bajaj Housing Finance’s IPO debut marks a significant milestone in the Indian stock market, highlighting the potential for substantial returns from well-positioned companies. The vibrant IPO activity and the diverse range of upcoming listings underscore the dynamism of the Indian economy and the growing confidence of investors. For those looking to participate in the IPO market, a disciplined approach, thorough research, and expert guidance are essential to navigate the opportunities and risks effectively. As the market continues to evolve, staying informed and making prudent investment decisions will be key to capitalizing on the growth potential of India’s burgeoning IPO landscape.