Bajaj Housing Finance made a remarkable debut on the BSE on Monday, with its shares listing at Rs 150, a premium of 114.2 per cent over the issue price of Rs 70.
Despite the strong market debut, analysts have urged caution for retail investors; they highlighted concerns about the stock's current valuation following the rally.
Bumper listing but cautious approach ahead: Expert
"As expected, the Bajaj Housing Finance stock listed at a huge premium to the IPO price. The company, coming from the Bajaj Finance stable, runs a high quality business with professional management.
However, investors need to be cautious in blindly buying into the stock now, as at close to 10 times book, the stock is trading at stretched valuations.," said Shriram Subramanian, Founder and MD, InGovern Research Services.
IPO structure
The highly anticipated IPO had attracted significant attention from investors. The offering comprised a fresh issuance of shares worth up to Rs 3,560 crore, along with an offer-for-sale component of shares worth Rs 3,000 crore from its parent company, Bajaj Finance.
Market experts have also expressed optimism about the stock's growth potential, emphasising the company's strong fundamentals and its standing as one of the most stable non-banking financial companies (NBFCs) in India.
Expert's opinion
"There is significant potential for decent listing gains. The company has successfully raised capital through AAA-rated fixed deposits, which has attracted banks and institutions at competitive rates.
With the interest rate cycle peaking and expectations of a downward trend in rates, interest-rate-sensitive sectors and companies like Bajaj Housing Finance are well-positioned to perform. Investors should consider applying," said Vijay Chopra, a stock market expert.
IPO details
The Rs 6,560-crore Bajaj Housing Finance IPO, which was open for bidding from September 9 to September 11, was subscribed 63.61 times. Bids were received for 46,28,35,82,522 equity shares against 72,75,75,756 shares on offer.
While the initial response to Bajaj Housing Finance's IPO has been positive, investors are advised to carefully consider the stock's current valuation before making further decisions.
