IPO listed on 16 Sep'24
Bajaj Housing Finance Ltd
Minimum Investment
₹ 14,980 / 214 shares
Grey market premium
₹ 57 (81% premium)
Issue price
₹ 70
Listing price
₹ 150
Listing day %
136%
Listing on
Sep 16, 2024
Our Verdict:
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- Bajaj Housing Finance Ltd (BHFL) is the second-largest housing finance company in India and has achieved significant growth in its loan book and profitability.
- The IPO is offered at a price-to-earnings (P/E) ratio of 27x based on FY24 earnings. Although the valuation is at a premium compared to some of its peers, we believe this premium is justified due to the robust backing from its parent company, Bajaj Finance, and its impressive track record of high-quality growth. Additionally, the positive grey market premium also indicates a strong market debut.
- Considering BHFL's low exposure to risky assets, consistent profitability, solid support from the parent company, and significant market potential, investors are advised to subscribe to the IPO from a medium-to-long term perspective.
About the company
Founded in
13 Jun'08
Managing director
Atul Jain
- BHFL ranks as India's second-largest housing finance company and operates as a wholly-owned subsidiary of Bajaj Finance, the largest retail asset financier in the country. BHFL provides a range of mortgage products for both retail and commercial customers, featuring tailored offerings to facilitate cross-selling and up-selling.
- BHFL has experienced faster growth than the broader market by effectively leveraging the group's ecosystem. It holds a 34% market share in the prime home loan segment, which represents over 57% of its total product portfolio.
STRENGTHS
- Strong Market Position: BHFL is India's second-largest HFC in terms of assets under management, backed by strong growth and a diverse portfolio. It benefits from the esteemed "Bajaj" brand name, renowned for its reliability and strong brand equity in the retail sector.
- Impressive Growth Trajectory: BHFL has shown robust financial growth with its total income and net profit experiencing compounded annual growth rates (CAGRs) of 42% and 56% respectively, from FY22 to FY24.
- Impressive AUM Growth: The assets under management (AUM) have seen a significant increase, growing at a CAGR of 31% from Rs 53,322 crore in FY22 to Rs 91,370 crore in FY24 and reaching Rs 97,071 crore by June 30, 2024. This growth in AUM surpasses that of other HFCs, supported by a secured and diversified product suite along with strong brand equity.
- Robust Risk Management: BHFL employs well-established credit evaluation and risk management practices, resulting in the lowest Gross Non-Performing Assets (GNPA) and Net Non-Performing Assets (NNPA) among its peers, with GNPA at 0.28% and NNPA at 0.11% in Q1FY25.
- Broad Access to Funding: With the backing of the highest credit ratings from prominent rating agencies, BHFL benefits from a variety of low-cost borrowing sources.
RISK FACTORS
- Geographical Concentration: As of June 30, 2024, approximately 85% of BHFL's AUM are concentrated in just five states. Any negative developments in these areas could potentially impact the firm’s business, operational results, cash flows, and financial health adversely.
- Customer Concentration Risk: BHFL faces risks associated with a concentration of loans to specific customers. As of June 30, 2024, loans to its top 10 and 20 largest customers represent 6.2% and 8.8% of the total outstanding loans, respectively.
Financials
All Values are in Cr.
Issue details
Issue type
Mainstream
Issue size
₹ 6,560 crore
Fresh Issue
₹ 3,560 crore
OFS
₹ 3,000 crore
Price range
₹ 66 - 70
Lot size
214 shares
Issue Objective
BHFL intends to use the net proceeds from the fresh issue to enhance its capital base, which will support its future business needs, including onward lending.
Dates
Bidding open
9 Sep'24
Bidding close
11 Sep'24
Allotment date
12 Sep'24
Refund date
13 Sep'24
Listing
16 Sep'24
IPO Reservations
Qualified institutional buyers
<50%
Non-institutional investors
>15%
Retail individual investors
>35%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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