Bajaj Housing Finance IPO (Initial Public Offering) and its Details.
Bajaj is one such name that has tremendous impact in the business and financial market of India today Bajaj group is one of those conglomerates of India that have always been setting high standards and growth parameters in the field they work. One of its subsidiaries namely BAJAJ Housing Finance Limited (BHFL) had been enhancing good performance in the housing finance segment The. This is because in the future there is an IPO which has created a lot of buzz within the investment community.
This blog will therefore aim at expanding on; Bajaj Housing Finance Company Ltd; its business; results; and, the IPO that has created a lot of buzz within the market.
1. Overview of Bajaj Housing Finance:
Bajaj Housing Finance Limited is completely owned by Bajaj Finance which is again a part of Bajaj group which was established in 2008 in Pune, Maharashtra. And in the recent years it has carved a niche for its in the country’s housing finance market and provides home loan, loan against property, lease rental discounting, construction finance and other commercial loans to its individual as well as corporate clients.
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Vision and Mission of BHFL
The BHFL has a vision to establish itself as a premier financier for housing having focus on innovativeness and customers. It is expected to have a process supported by technology, low cost of interest on the loan as well as quick accessibility of the loan.
Product Offerings by Bajaj Housing Finance
- Home Loans: Home loans offered by BHFL are for the purchase of new homes, resale homes and self constructed homes. It provides reasonable rates of interest and also easy payment terms to all categories of clients including first-time home buyers and experienced investors.
- Loan Against Property (LAP): Loan Against Property is a loan given by undertaking your property as mortgage. It is intended for those customers whose purpose is to obtain necessary funds for themselves or their companies.
- Lease Rental Discounting (LRD): As some of the property owners might need money immediately but they have future lease rentals, BHFL provides funding for property owners against lease rentals. This goes well for commercial property owners who seek to get liquidity in their property investments.
- Construction Finance: Designed for builders and developers, this product offers funding options for construction and other housing and non-housing developments.
- Balance Transfer Facility: Another service/plant that this company provides is the balance transfer services where customers are allowed to transfer their existing home loans to BHFL from other companies but at cheaper rates of interest where necessary.
Market Posture and Competitive Advantage
The Sector of BHFL is a saturated market which has some big players like HDFC Ltd., LIC Housing Finance and ICICI Home Finance. However, com[any has managed to draw out some niche clients for itself due to several key factors:
- Brand Trust: A Bajaj Group member, BHFL possesses a well-established brand image that helps build trust with the customers as well as investors.
- Technology-Driven Operations: Recourse to modern tools and technologies enables BHFL to make its processes more efficient, decrease TTs and deliver improved customers’ experience.
- Diversified Product Portfolio: Its diverse portfolio of financial services target the working class employee, the freelancer, a working professional or even a builder or developer.
- Risk Management: The company has a conservative risk philosophy, thus it emphasizes on the asset quality and reducing NPA (Non Performing Assets).
2. Financial Performance and Expected Growth
BHFL has been in consistent growth all these years showing its robust business model and market strategy. Here are some highlights of its financial performance:
Revenue and Profitability Growth of BHFL
Revenue Growth: These include increased revenue for BHFL as consummated by the growth in its loan portfolio, high demand for housing finance and moderate interest rates. The overall revenue Generated by the company has been increasing and the growth has been in the region of almost 30% on an average over the last few years in terms of CAGR.
Profitability: Therefore, due to some of the challenges that are likely to be brought about by changes in the economic conditions and which has recently been compounded by the COVID-19 pandemic, BHFL continues to be a profitable firm. In the financial year ending 2023 company has reported the net profit of around ₹1,000 crore for the company which indicates the steep growth from the financial year 2022.. This was on account of over-efficient management of costs, for increase in net interest margins and decline in credit risk.
Quality of Asset and Capital Adequacy
- Asset Quality: BHFL has been able to keep its asset quality healthy with gross non-performing assets (GNPA) ratio far much better than the industry average. This will portray the right underwriting policies and measures of risk control on the company’s side.
- Capital Adequacy Ratio (CAR): The company has a good CAR of 24.75% in operation, which is way higher than the prescribed by the Reserve Bank of India (RBI). This is an indication that BHFL maintains higher capitalization levels hence has the potential of bearing potential losses.
Loan Book and Market Penetration
- Loan Book: BHFL’s loan portfolio as on March 2023 is more than ₹ 50,000 crores indicating that the company has continuously increased its loan dispensing in different product segments. Home loan category forms the largest portion of the company’s overall business division, the other two divisions being loan against property and construction finance.
- Market Penetration: Currently, BHFL has grown its market reach and has ventured into expansion especially in Tier II and Tier III cities apart from the cosmopolitan cities. This is an expansion that the organization has undertaken in line
3. Details of Bajaj Housing Finance IPO
The IPO of BHFL that is under process has created a lot of buzz in the investors’ community. Here’s what we know so far:Here’s what we know so far:
IPO (Initial Public Offering) objectives
Primary objectives of the IPO include:
- Raising Capital: The IPO is anticipated to attract a large amount of capital which will be employed for expansion, increasing loan portfolio and drilling a stronger balance sheet for the firm.
- Reducing Debt: A portion of the funds raised may be utilized to service or even pre-pay some loans hence bringing down the interest costs and enhancing on profitability.
- Enhancing Brand Visibility: The same will help in improving the BHFL’s brand image in the market, which means it will be easy to attract more customers and more business opportunities.
IPO lot size and Timeline of Bajaj Housing Finance
- Lot size: Bajaj Housing Finance IPO price band is set at ₹66 to ₹70 per share. The minimum lot size for a retailer is 214 Shares and the minimum amount of investment required by retail investors is ₹14,980. The minimum lot size investment for sHNII is 14 lots (2,996 shares), amounting to ₹209,720, and for bHNII, it is 67 lots (14,338 shares), amounting to ₹1,003,660.
| Application | Lots | Shares | Amount |
| Retail (Min) | 1 | 214 | ₹14,980 |
| Retail (Max) | 13 | 2782 | ₹194,740 |
| S-HNI (Min) | 14 | 2,996 | ₹209,720 |
| S-HNI (Max) | 66 | 14,124 | ₹988,680 |
| B-HNI (Min) | 67 | 14,338 | ₹1,003,660 |
Bajaj Housing Finance IPO Timeline
Bajaj Housing Finance IPO opens on September 9, 2024, and closes on September 11, 2024.
| IPO Open Date | Monday, September 9, 2024 |
| IPO Close Date | Wednesday, September 11, 2024 |
| Basis of Allotment | Thursday, September 12, 2024 |
| Initiation of Refunds | Friday, September 13, 2024 |
| Credit of Shares to Demat | Friday, September 13, 2024 |
| Listing Date | Monday, September 16, 2024 |
Bajaj Housing Finance IPO (Initial Public Offering) Details
| IPO Date | September 9, 2024 to September 11, 2024 |
| Listing Date | September 16, 2024 |
| Face Value | ₹10 per share |
| Price Band | ₹66 to ₹70 per share |
| Lot Size | 214 Shares |
| Total Issue Size | 937,142,858 shares (aggregating up to ₹6,560.00 Cr) |
| Fresh Issue | 508,571,429 shares (aggregating up to ₹3,560.00 Cr) |
| Offer for Sale | 428,571,429 shares of ₹10 (aggregating up to ₹3,000.00 Cr) |
| Issue Type | Book Built Issue IPO |
| Listing At | BSE, NSE |
| Share holding pre issue | 7,819,575,273 |
| Share holding post issue | 8,328,146,702 |
Bajaj Housing Finance IPO : Expected Listing Price
Bajaj Housing Finance IPO last GMP is ₹66, last updated Sep 10th 2024 12:59 PM. With the price band of 70.00, Bajaj Housing Finance IPO’s estimated listing price is ₹136 (cap price + today’s GMP).The expected percentage gain/loss per share is 94.29%.
Risks Involved with Bajaj Housing Finance IPO
While the IPO presents an exciting opportunity, it is essential to consider the potential challenges and risks:It is, however, important to note that with such investment opportunities such as the IPO there comes opportunities that are associated with certain risks and challenges:
- Competitive Landscape
As with any industry the BHFL has to compete with the big players of home finance including HDFC Ltd., ICICI Home Finance and others. It is highly probable that market share and market price are the two critical factors influencing the nature of the consumer market for market leading companies.
- Regulatory Risks
The sector receives high legalization from institutions including the Reserve Bank of India/in addition to the National Housing Bank. Indeed, there are macro factors that affect the operations of BHFL and these factors include; The Macro influences include changes in the rate of interest, changes in the regulation policies and the general Macro factors.
Investor's view at Bajaj Housing Limited IPO
The BHFL company is expected to meet the high expectations of the investment community following the new IPO due to performance, growth and compatibility of the company with the parent company, Bajaj Finance. Those with high interest are the retail investors, insurance funds, NRIs that are actively investing in the Indian stocks for long term. Hedge funds, Private Equity, Domestic mutual funds, Foreign Institutional Investors (FIIs) will also be having high interest levels.
Also Read : Ola Electric Share Price Target
The Bajaj Housing Finance IPO (Initial Public Offering) is shaping up to be a significant event in the Indian financial markets. For investors, it presents an opportunity to participate in the growth story of a prominent player in the housing finance sector, backed by a reputable brand like Bajaj. The company’s strong fundamentals, diverse product portfolio, technological edge, and prudent risk management practices make it an attractive investment proposition.
However, potential investors should carefully assess the pricing, valuation, market conditions, and inherent risks before making a decision. Consulting with financial advisors and staying informed about the latest updates regarding the investment in the company
FAQ'S
What is lot size of Bajaj Housing Finance IPO (Initial Public Offering)
Bajaj Housing Finance IPO price band is set at ₹66 to ₹70 per share. The minimum lot size for a retailer is 214 Shares and the minimum amount of investment required by retail investors is ₹14,980. The minimum lot size investment for sHNII is 14 lots (2,996 shares), amounting to ₹209,720, and for bHNII, it is 67 lots (14,338 shares), amounting to ₹1,003,660.
When was bajaj housing finance IPO launched
Bajaj Housing Finance IPO date of subscription is scheduled for Monday, September 9, and will close on Wednesday, September 11.
What is the estimated listing price of Bajaj housing finance?
Bajaj Housing Finance IPO’s estimated listing price is ₹136 (cap price + today’s GMP).The expected percentage gain/loss per share is 94.29%.
What is the offering price for Bajaj Housing Finance IPO?
Bajaj Housing Finance is offering at 67-70 rupees per share at its IPO .
