The Rs 6,560-crore initial public offering (IPO) of Bajaj Housing Finance Ltd witnessed a terrific response from investors on the first day (Day 1) of bidding process. On Monday, the portion for non-institutional investors (NIIs) was subscribed 4.35 times and the category reserved for shareholders was booked 2.90x.
Retail investors, qualified institutional buyers (QIBs) and employee portions saw 2.90x, 1.07 and 32 per cent bids, respectively. The issue received 1,46,70,35,056 bids against 72,75,75,756 shares on offer with an overall subscription of 2.02 times.
The Bajaj Group firm is selling its shares in the range of Rs 66-70 apiece and the offer is open till Wednesday, 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 capital base to meet future business requirements of the company towards onward lending.
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.
Bajaj Housing has reserved shares worth Rs 200 crore for eligible employees, while shares worth Rs 500 crore are reserved for eligible shareholders of Bajaj Finance and Bajaj Finserv Ltd. Out of the net offer, 50 per cent of shares will be allocated for (QIBs), while NII and retail investors will get 15 per cent and 35 per cent, respectively.
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.
Grey market premium (GMP)
In the grey market, Bajaj Housing shares were last seen trading at a premium of 87.86 per cent against its issue price of Rs 70 (upper price band). The stock is likely to be listed on September 16.
Brokerage views
At least five domestic brokerages, such as IDBI Capital, Nirmal Bang Securities, StoxBox, Chola Securities and DR Choksey Finserv, 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.