Bajaj Housing Finance IPO subscribed 7.51 times on Day 2; check latest GMP & more

The Rs 6,560-crore initial public offering (IPO) of Bajaj Housing Finance Ltd continued to garner a stellar response from investors on the second day (Day 2) of bidding process. On Tuesday, the portion kept for non-institutional investors (NIIs) witnessed the maximum interest and was subscribed 16.46 times. The category reserved for shareholders was booked 9.55x.

Qualified institutional buyers (QIBs), retail investors and employee portions saw 7.46x, 3.84x and 97 per cent bids, respectively. The issue received 5,46,13,89,782 bids against 72,75,75,756 shares on offer with an overall subscription of 7.51 times.

The price band of the IPO has been fixed at Rs 66-70 apiece and the offer will conclude tomorrow (September 11). Investors can apply for a minimum of 214 equity shares and in multiples thereafter.

Bajaj Housing is aiming to raise Rs 6,560 crore from its primary stake sale, which includes a fresh share sale of Rs 3,560 crore and an offer-for-sale (OFS) of Rs 3,000 crore from its promoter Bajaj Finance Ltd. The net proceeds from the issue will be utilised to augment the capital base to meet future business requirements of the company towards onward lending.

Brokerage view

At least 16 domestic brokerages, such as Chola Securities, IDBI Capital, Incred Equities, Nirmal Bang Securities, Canara Bank Securities, Reliance Securities, Devan Choksey Research, Marwadi Shares, BP Equities, StoxBox, Mehta Equities, LKP Research, Ventura Securities, SMIFS, Gupta Equities and Kunvarji Wealth Solutions, have given a 'Subscribe' call to the IPO.

"We are optimistic about Bajaj Housing's outlook due to its substantial brand equity, strategic business expansion plans, extensive geographic coverage, and enhanced technological infrastructure through its omnichannel approach. These factors are expected to improve operational efficiency and maintain favourable credit costs, supported by superior asset quality," DR Choksey Finserv stated.

Grey market premium (GMP)

In the grey market, Bajaj Housing shares were last seen trading at a premium of 94.29 per cent against its issue price of Rs 70 (upper price band). The stock is likely to get listed on September 16.

Ahead of its IPO, the company raised Rs 1,758 crore from anchor 104 investors. Bajaj Housing's anchor book includes names like the Government of Singapore, New World Fund Inc, ADIA, Fidelity, Invesco, HSBC, Morgan Stanley, Nomura, JP Morgan and a host of domestic mutual funds and insurance players.

Founded in 2008, the firm is a non-deposit-taking housing finance company (HFC) registered with the National Housing Bank (NHB) since 2015 and has been offering mortgage loans since the financial year 2018. It is part of the Bajaj Group, a diversified group of companies with interests in various sectors.

The company reported a net profit of Rs 482.61 crore with a revenue of Rs 2,208.73 crore for the three months ended on June 30 2024. Its net profit came in at Rs 1,731.22 crore with a revenue of Rs 7,617.71 crore for the financial year ended on March 31, 2024.

Kotak Mahindra Capital Company, BofA Securities India, Axis Capital, Goldman Sachs (India) Securities, SBI Capital Markets, JM Financial and IIFL Securities are the book-running lead managers of the issue, while Kfin Technologies is the registrar.

Separately, Tuesday (September 10) also marked Day 2 of two other mainboard IPOs, Tolins Tyres Ltd and Kross Ltd, which were booked 5.22 times and 2.56 times, respectively. Also, PN Gadgil Jewellers IPO opened today for subscription and the issue received 2.01 times bids on Day 1.