Bajaj Housing Finance IPO: Review, Valuation, Date & GMP

Bajaj Housing Finance IPO-Complete Overview

Bajaj Housing Finance IPO a Mainboard IPO is a book-built issue of Rs.6,560 crore (937,142,858 Shares) by Bajaj Housing Finance Ltd. The company was founded in 2008 and is a non-deposit-taking Housing Finance Company (HFC) that has been registered with the National Housing Bank (NHB) since 2015 and has started making mortgage loans since fiscal year 2018.

The corporation is a member of the Bajaj Group, a broad combination of businesses with holdings across multiple industries. To buy and renovate residential and commercial properties, Bajaj Housing Finance offers both people and corporations tailored finance solutions.

• For the three months that concluded June 30, 2024, and the FY 2024, it is the second-most profitable HFC in India in terms of returns on average equity and assets.

• After launching its mortgage activities, it developed the largest non-deposit-taking HFC in India based on AUM in just seven years.

• With Rs.9,70,713.3 million, it is the second-highest AUM in India.

The company offers a wide range of mortgage products, such as home loans, rent reductions, loans against property (LAP), and developer financing. 81.7% of the company's 308,693 active customers as of March 31, 2024, were house loan customers. 

The company is managed by 6 centralized retail loan review centers and 7 centralized loan processing centers, and it has a network of 215 branches in 174 locations throughout 20 states and three U.Ts.

This new IPO is to be launched on 09 September 2024, and its ‘initial public offering’ will end on 11 September 2024.

 

Bajaj Housing Finance IPO Overview

The Rs.6,560 crore Bajaj Housing Finance Ltd. IPO comprises a combination of a fresh Issue of 50.86 crore Shares amounting to Rs.3,560 crore and an Offer for Sale (OFS) of 42.86 crore Shares amounting to Rs.3,000 crore out of which 35% is allocated to retail investors, 50% to institutional investors and 15% to non-institutional investors. 

The IPO date is from 09 September to September 11, 2024. The IPO listing is on Monday, September 16, 2024, and it will be held on the BSE and NSE. Bajaj Housing Finance IPO price band is between Rs.66 to Rs.70 for each Share.

If You want to apply for the IPO, Click Here to Open a Demat Account.

Detailed Video: 

Company Financial

The company’s revenue grew by 34% and PAT increased by 38% during FYs ending 31 March 2024 and 31 March 2023

Below is the synopsis of the company's financial data for the financial year that concluded on 31 March 2024.

• The total assets of the company are Rs.88,538.83 crore.

• The company’s total revenue is over Rs.2,208.73 crore.

• The company’s PAT is Rs.482.61 crore.

• The net worth of the company is Rs.14,719.91 crore.

• The company's EBITDA is Rs.2,038.55 crore.

(Amount in Crore)

 

Revenue Bifurcation

Below is the revenue breakdown for various activities.

(Amount in million)

 

Segment-wise AUM Bifurcation During Last Three Fiscals

(Values in millions)

 

State-wise AUM Bifurcation During Last Three Fiscals

(Values in millions)

The Objective of The Issue

The company desires to use the Net Proceeds from the Issue to fulfill its following goals:

• Boost the capital base to enable the company to meet its future financing needs.

 

Peers of Bajaj Housing Finance Ltd.

 Note: The above comparison of listed peers is as per data by 31 March 2024.

Evaluation

The Bajaj Housing Finance IPO price is between Rs.66 to Rs.70 for each Share.

Evaluation of P/E Ratio

Considering the FY 2024, with an EPS of Rs.2.6 from the last year, the resulting P/E ratio is 26.92x.

Considering the weighted EPS of Rs.2.2 for the last three years, the P/E ratio is 31.82x.

 Comparative Analysis with Listed Peers

The average P/E Ratio of the industry is 20x.

In simple words, the P/E ratio of Bajaj Housing Finance IPO (26.92x), compared with the industry’s average P/E of 20x, has an overvaluation (on a P/E ratio basis only). Hence the price of the Share seems aggressively priced for the investors when considered based on the average P/E ratio of the industry.

Note: The EPS and weighted EPS of the company are as of 31 March 2024 and the industry P/E Ratio is computed based on the closing market price of the Share as of 19 August 2024.

 

IPO's Strengths 

• The ‘Bajaj’ brand has a remarkable history and is well-known for being a dependable retail brand with significant brand equity.

• With a track record of robust development driven by a diverse portfolio, it is the second-largest HFC in India based on AUM.

• Its omnichannel sourcing strategy and customer-focused digitization initiatives are the driving forces behind its strategic presence and technological expertise.

• In Fiscal 2024, it had the lowest GNPA and NNPA among its peers.

• It has access to a variety of affordable and flexible funding sources.

• Its ability to draw in and keep bright personnel is supported by a group of committed professionals who work with its seasoned management team.

 

IPO’s Weaknesses

• Its business, operational results, cash flows, and financial situation could all suffer if it is unable to swiftly or completely recover the full value of the collateral or the amounts owed from defaulted loans.

• Its financial situation and operational outcomes may suffer if it is unable to maintain sufficient provisioning coverage, effectively manage the amount of gross non-performing assets/stage 3 assets in its portfolio, or if regulator-mandated provisioning requirements change.

• Its business, operating results, cash flows, and financial health might all suffer materially if the company is unable to meet the Reserve Bank of India's standards.

• Since the majority of its assets are managed in 4 states and the UT of New Delhi, any unfavorable events in these areas could harm its operations, cash flows, and financial health.

• Due to the substantial real estate exposure in its portfolio, any notable downturn or unfavorable event in the real estate market might raise impairment losses.

 

Bajaj Housing Finance IPO GMP Today

Bajaj Housing Finance IPO GMP today is Rs.55.50 as of 02 September 2024.

 

 

Bajaj Housing Finance IPO Timetable (Tentative)

The IPO open date is from September 09 to September 11, 2024, with IPO allotment on September 12, 2024, refund initiation on September 13, 2024, and listing on September 16, 2024.

 

Bajaj Housing Finance IPO Details 

The IPO with a face value of Rs.10 per Share is set to start on September 09, 2024, close on September 11, 2024, and offers a total issue size of 937,142,858 Shares between Rs.66 to Rs.70 per Share with a Lot size of 214 Shares and will be listed at BSE and NSE.

 

Bajaj Housing Finance IPO Lot Details 

The IPO allows retail investors to invest in a minimum and maximum of 1 Lot (214 Shares) amounting to Rs.14,980, and 13 Lots (2782 Shares) amounting to Rs.1,94,740 respectively, while for HNI investors, the minimum Lot is 14 (2,996 Shares) amounting to Rs.2,09,720.

Bajaj Housing Finance IPO Reservation

Promoters and Management of Bajaj Housing Finance  Ltd.

• Bajaj Finance Ltd.

• Bajaj Finserv Ltd.

 

Bajaj Housing Finance IPO Lead Managers

• Kotak Mahindra Capital Company Ltd.

• Bofa Securities India Ltd.

• Axis Capital Ltd.

• Goldman Sachs (India) Securities Private Ltd.

• SBI Capital Markets Ltd.

• JM Financial Ltd.

• IIFL Securities Ltd.

 

Dividend Policy

The company has not paid any dividends during the last 3 FYs.

 

Conclusion

The company has experienced negative cash flow in operating and investing activities in the last few fiscal years. To fulfill its objectives, the company is currently conducting an IPO for the public.

We believe the information offered in this blog helps you learn about the company's financial performance. So this blog will be very useful to you if you are looking for information about the approaching IPO since it will give you reliable information about the company's, insights, financials, and past performance. If this informative blog piques your interest, you may be interested in reading our other related and useful posts on our website.

 

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

To Read the Prospectus of the Company Click Here to Download the DRHP.

Disclaimer: 

The content is purely for educational and information purposes only. We do NOT encourage/advise/suggest our active readers to be involved in any kind of buying or selling securities activities. Always consult your eligible financial advisor for investment-related decisions. The author does NOT through this blog intend to involve readers in trading.  

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