Shares of Bajaj Housing Finance made a stellar Dalal Street debut on Monday and the euphoria for the Bajaj Group backed company continued even after a multibagger listing for the counter. The stock saw some solid follow up buying post listing signaling the strong demand for the counter.
Shares of Bajaj Finance were listed at a premium of 114.29 per cent at Rs 150 on both BSE and NSE, over the issue price of Rs 70 per share. However, the stock zoomed another 10 per cent, hitting the upper circuit on its maiden trading session to Rs 165, taking the overall gains to 136 per cent over the issue price.
The mammoth listing gains have pushed the total market capitalization of the company above Rs 1.35 lakh crore and investors have turned cautious if they should book profits in the company or wait for some correction to enter the counter. Majority of the analysts are suggesting investors to book profit in the stock.
The blockbuster performance was widely anticipated, given the IPO's overwhelming subscription of 67.43 times and the sky-high grey market premium. The listing reflects investors' unwavering confidence in the company's robust financials, backed by the prestigious Bajaj Group, said Shivani Nyati, Head of Wealth at Swastika Investmart.
"Investors who were fortunate enough to secure allotments in the IPO may consider booking profit now, but those who want to hold their positions may do so by potentially setting a stop loss at Rs. 135 as a risk management strategy. However, it's essential to continuously monitor the company's performance and market conditions for informed decision-making," she added.
The company is the second largest HFC in India with a track record of strong growth driven by a diversified portfolio. The company has a strategic presence with omni-channel sourcing strategy, driven by customer-focused digitization initiatives and technology, said Mahesh M Ojha, AVP Research at Hensex Securities.
"We believe the company is a good portfolio pick. We suggest investors to book at least 50 per cent profits on the listing day itself, rest can be held for long term investment. In case, fresh investors are willing to invest, 135 - 140 levels can be considered suitable," he suggested.
The IPO of Bajaj Housing Finance was open for bidding between September 9-11. The Pune-based company had offered its shares in the fixed range of Rs 66-70 per share with a lot size of 214 shares. The company raised Rs 6,560 crore via its primary offering, which was overall booked 63.61 times.
Incorporated in 2008, Bajaj Housing Finance 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.
"We recommend conservative investors to choose profit booking, as listing gain is over and above our expectations, while long term investors can continue holding for long term growth as the sector outlook remains very optimistic given the company's well-positioned business model," said Prashanth Tapse, Senior VP (Research), Mehta Equities.
Bajaj Housing Finance anticipates maintaining a similar growth rate of around 30-35 per cent YoY. This is notably higher compared to industry growth at approximately 13-14 per cent YoY, said Nipun Lodha, Director - Corporate Finance, PL Investment Banking. "In essence, Bajaj Housing Finance is expanding at double the rate of industry growth," he said.