Bajaj Housing Finance IPO allotment: What are the odds for HNIs, retailers and shareholders?

Bajaj Housing Finance IPO, which scripted history during the bidding process, has now left investors wondering what are the odds of getting the allotment of shares. Interestingly, the issue had a reservation worth Rs 500 crore for eligible shareholders of Bajaj Finance Ltd and Bajaj Finserv Ltd, who could apply under two categories for the issue, other than HNI or retail category.
 

The IPO of Bajaj Housing Finance fetched bids worth Rs 3.24 lakh crore as the Rs 6,560 crore issue was overall subscribed 63.61 times, net of anchor book. The quota allocated for qualified institutional investors was booked 209.36 times, alone getting bids for more than Rs 2.60 lakh crore.
 

HNIs had 5,52,85,57,748 equity shares or 15 per cent of the net issue reserved for them, attracting bids worth Rs 38,700 crore, while retail investors, who had 2,18,80,22,028 equity shares 35 per cent of the net issue, fetched bids amounting to Rs 15,300 crore. Shareholder's allocation of 1,32,77,57,864 equity shares saw bidding for Rs 9,300 crore.
 

The bumper bidding for the IPO has left investors guessing and calculating the odds for getting the allotment of shares for the Bajaj Housing Finance IPO. Market participants interacting with Business Today said that prima facie retail investors have the best chance of getting the allotment, while shareholders shall be better placed, if they have made a full application of Rs 2 lakh.
 

Kranthi Bathini, Director of Equity Strategy at WealthMills Securities said that the issue saw a solid response from all the categories of investors on the back of its strong parentage and sound business model. Retail investors have the best case of allotment but one should consider profit booking on the listing.
 

Prashanth Tapse, Senior VP (Research) at Mehta Equities said that investors under the retail category have the best or sya highest chances of allotment in this IPO as odds are favouring them. "The ratio of applications getting cancelled will be higher in the shareholders category compared to the retail category as their criterion is stricter and there will be more confusion there," he said.
 

Explaining the odds, Narendra Solanki, Head of Fundamental Research at Anand Rathi Shares & Stock Brokers said that investors had four options to apply under big HNI, small HNI, retail and shareholder's categories. A few investors, who owned shares of Bajaj Finance or Bajaj Finserv as of June 30, 2024, could apply for two categories out four.
 

"Applications bidding for 13 lots will be prioritized under shareholder's category," he said. "The basis of allotment will move in the descending order, that is, from highest to lowest. So, investors applying for 13 lots have the best chance in this category, while the chances of allotment get diminished as you bid for lesser lots."
 

On the other hand, retail investors will have higher probability of allotment as all applications shall be treated equal and maximum number of investors shall be given at least one lot of 214 equity shares each, as explained by the analysts.
 

Here is the calculation for the allotment odds:
 

Big HNI category: 2 investors out of 17 investors will get 2996 shares (Probability: 11.76 per cent)
 

Small HNI category: 2  investors out of 55  investors will get 2996 shares (Probability: 3.6 per cent)
 

Retail category: 1 investor out of 5 investors will get 214 shares. (Probability: 20 per cent)
 

Shareholders category: 13 out of 18 will get 214 shares, if one has applied for 13 lots.

 

The IPO of Bajaj Housing Finance was open for bidding between September 9 and September 11. The Pune-based company had offered its shares in the fixed price band 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 included a fresh share sale of Rs 3,560 crore and an offer for sale worth Rs 3,000 crore.