Bajaj Housing Finance Launches Initial Public Offering

Bajaj Housing Finance Limited (BHFL), a prominent player in India’s housing finance sector, has announced the initiation of its Initial Public Offering (IPO). The launch follows the company securing ₹1,758 crore from anchor investors as of September 6, 2024.

The public subscription for the Bajaj Housing Finance IPO is set to begin on September 9, 2024, and will conclude on September 11, 2024. The price band for the shares has been established between ₹66 to ₹70 each.

In the IPO, up to 50% of the shares are reserved for qualified institutional buyers (QIB), 15% for non-institutional investors (NII), and a minimum of 35% is allocated for retail investors. The company has also reserved shares worth ₹500 crore for existing shareholders, catering specifically to individuals and Hindu Undivided Families (HUFs) holding public stock in the parent company.

Founded under the auspices of the Bajaj Group, Bajaj Housing Finance has been providing mortgage loans since the fiscal year 2018 and operates as a non-deposit housing financing company.

As of September 9, 2024, reports indicate that the IPO has been subscribed 33% on its first day, with bids for approximately 24.3 million shares against a total of 72.8 million shares available. Retail investor participation has reached 36%, whereas non-institutional investors have subscribed at 68%. The qualified institutional buyers’ portion remains unfilled.

According to research analysts, Bajaj Housing Finance benefits from its affiliation with the well-established Bajaj Group, demonstrating consistent growth in sales and profits. The IPO is viewed as fairly valued, with strong expectations for growth and demand, suggesting a favorable environment for subscription.

Bajaj Housing Finance’s IPO consists of an offer for sale (OFS) of equity shares totaling ₹3,000 crore by its parent company, Bajaj Finance, along with a new issue of ₹3,560 crore. The company aims to utilize the proceeds to strengthen its capital base, in alignment with the Reserve Bank of India‘s directive for higher layer non-banking financial organizations (NBFCs) to list on stock exchanges by September 2025.

The share allotment process is expected to occur on September 12, 2024, with shares credited to demat accounts by September 13, followed by the anticipated listing on the stock exchanges on September 16, 2024.