-By Samarth Dawar
Post-IPO, Bajaj Housing Finance has witnessed significant investor interest, debuting with a 114% listing gain. This strong market performance reflects solid fundamentals and the trust associated with the Bajaj brand. While some analysts recommend profit booking due to high initial gains, many suggest that long-term investors could benefit from holding the stock.
Let's take a look at the recent headline for conversation in this blog -
Bajaj Housing Finance has made waves in the stock market with a ground shattering IPO. Listing at a staggering 114% premium over its IPO price – the stock opened at ₹150 on both the BSE and NSE against an issue price of ₹70.
The ₹6,560 crore IPO is the largest of the year so far., being subscribed nearly 67 times over. This broke all previous records, including that of Tata Technologies, with bids exceeding ₹3.2 lakh crore.
The Qualified Institutional Buyers (QIBs) category led the charge, subscribing 209.36 times, followed by Non-Institutional Investors (NIIs) at 41.51 times, and Retail Individual Investors (RIIs) at 7.04 times.
Before listing, Bajaj Housing Finance’s shares were trading at a grey market premium (GMP) of 120%.
After listing, Bajaj Housing Finance traded at a price-to-book (PB) ratio of 5.2x, significantly higher than peers.
So, what’s driving this success? It’s not just the brand (though being part of the Bajaj family certainly does help). Bajaj Housing Finance has carved out a niche for itself with diverse services across a large spectrum. With its aggressive growth plans, the company is anticipating a year-on-year AUM growth of 30-35%, which is double the industry average of 13-14%.
So, we understand the reason why investors are so bullish, but here’s the deeper side to it.
If you didn’t manage to grab a slice of the Bajaj Housing Finance IPO, don’t panic. It’s easy to fall into the trap of making impulsive decisions driven by FOMO (fear of missing out), but seasoned investors know the importance of avoiding hasty choices.
Financial experts suggest caution due to the high valuations post-listing. Investors are advised to conduct thorough analysis and consider long-term investment horizons
“The combination of strong financials, a reputable brand, and immense investor interest positions Bajaj Housing Finance for a potentially successful listing," said Nyati , Head of Wealth at Swastika Investmart,
Narinder Wadhwa, MD of SKI Capital, has set a target price of Rs 225 for Bajaj Housing Finance, driven by confidence in its future earnings and growth.
Phillip Capital also sees a 16 percent upside for the company. They highlighted that the company's popular loan size of Rs 50 lakh, which covers nearly 65 percent of home loan originations in India will be a gamechanger. They project that till 2026, Bajaj Housing's balance sheet could grow to Rs 2 lakh crore from present Rs 81,830 crore (6.5 times).
Market Feedback
Post-listing, investors are evaluating the stock based on its listing price versus the pre-IPO expectations. To summarize the market responses :
Continued Upward Momentum: The stock has continued to show strong performance, with analysts predicting further upside potential.
Investor Enthusiasm: Retail investors and institutional investors alike have shown sustained interest in the stock.
Market Leadership: Bajaj Housing Finance's position as a leading player in the Indian housing finance market is expected to drive long-term growth.
But of course, being financially literate, it's essential to look at both the yin, and also yang:
Market Volatility: The stock market can be subject to fluctuations, and investors should be prepared for potential price swings.
Competitive Landscape: Bajaj Housing Finance faces competition from other players in the housing finance sector.
Economic Factors: Changes in interest rates, GDP growth, and other economic indicators can impact the company's performance.
Overall, the market has responded positively, though cautiously, to the Bajaj IPO. The stock's performance in the coming weeks will be crucial in determining investor confidence and long-term value. So, the game keeps on running.
For investors, the key will be Bajaj’s ability to meet its post-IPO promises and continue growing its core businesses.
If you’re still keen on Bajaj Housing Finance, it’s worth adopting a long-term perspective. The stock’s recent surge doesn’t mean you’ve missed the boat; it might just mean there is another entry point waiting for you.
Stay informed, keep an eye on market movements, and be patient. A well-timed decision based on careful analysis always beats a rushed move driven by emotion.
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