Bajaj Housing Finance had a strong debut on the BSE on Monday, with shares listing at Rs 150, marking a 114.2% premium over the issue price of Rs 70. Despite this impressive start, analysts have advised retail investors to be cautious due to concerns about the stock’s current valuation after the rally.
Shriram Subramanian, Founder and MD of InGovern Research Services, commented on the situation: “As expected, the Bajaj Housing Finance stock listed at a significant premium to the IPO price. The company, part of the Bajaj Finance group, operates a high-quality business with professional management. However, at nearly 10 times book value, the stock is trading at stretched valuations, so investors should avoid buying blindly.”
The IPO had garnered significant attention from investors, comprising a fresh issuance of shares worth up to Rs 3,560 crore and an offer-for-sale component worth Rs 3,000 crore from its parent company, Bajaj Finance. Market experts have also shown optimism about the stock’s potential, citing the company’s strong fundamentals and its reputation as one of India’s most stable non-banking financial companies (NBFCs).
Stock market expert Vijay Chopra shared his views on the company’s outlook: “There is potential for decent listing gains. Bajaj Housing Finance has successfully raised capital through AAA-rated fixed deposits, attracting banks and institutions at competitive rates. With the interest rate cycle peaking and expectations of a downward trend, companies like Bajaj Housing Finance are well-positioned to perform. Investors should consider applying.”
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The Rs 6,560-crore IPO, open for bidding from September 9 to September 11, was subscribed 63.61 times, with bids received for 46,28,35,82,522 equity shares against 72,75,75,756 shares on offer. Although the initial response to Bajaj Housing Finance’s IPO has been positive, investors are urged to carefully evaluate the stock’s current valuation before making further investment decisions.