The Bajaj Housing Finance IPO has garnered significant attention, particularly as the IPO listing date approaches on 16th September 2024. With shares commanding a Grey Market Premium (GMP) of ₹79, many investors are wondering whether to hold or sell on the listing day. This blog will explore the IPO’s financials, market sentiment, and expert advice to help investors make informed decisions.
Bajaj Housing Finance IPO Overview
| Particulars | Details |
|---|---|
| IPO Price Band | ₹68-₹72 per share |
| Issue Size | ₹5,000 crore |
| Listing Date | 16th September 2024 |
| GMP Today | ₹79 (as of 15th September 2024) |
| Expected Listing Price | ₹149-₹150 |
| Sector | Housing Finance |
With the expected listing price of ₹149, a significant upside is anticipated compared to the upper price band of ₹72, representing a potential gain of 110%.
Grey Market Sentiment: A Bullish Outlook
The Bajaj Housing Finance IPO GMP continues to rise, indicating strong demand. On 15th September, the GMP was ₹79, reflecting growing optimism. However, while the GMP is a good indicator of market sentiment, investors should consider fundamentals before making decisions.
For more information on IPO grey market trends, visit our IPO GMP page.
Financials and Growth Potential
Bajaj Housing Finance Ltd., a non-deposit-taking housing finance company, has shown robust financial performance. The company’s AUM (Assets Under Management) grew at a CAGR of 30.9% from FY22 to FY24, positioning it as one of the fastest-growing NBFCs in the country.
| Financial Metric | FY22 | FY24 |
|---|---|---|
| AUM | ₹743 billion | ₹971 billion |
| GNPA (Gross NPA) | 0.35% | 0.30% |
| NNPA (Net NPA) | 0.15% | 0.12% |
| Collection Efficiency | 98.4% | 99.5% |
Bajaj Housing Finance’s efficiency in managing its loan book, coupled with a strong risk management framework, has helped it maintain one of the lowest GNPA and NNPA ratios among peers. For further insights on Bajaj Housing Finance financials, visit our IPO Review page.
Should You Hold or Sell?
Stock market experts recommend that existing allottees book partial profits and hold the remaining shares for long-term gains. The stock’s expected listing price could be inflated due to market euphoria rather than strong fundamentals. Here’s what the experts say:
- Arun Kejriwal, Founder of Kejriwal Research and Investment Services, believes that while the IPO may list at a premium, the stock’s post-listing valuations may not justify the company’s fundamentals.
- Astha Jain, Senior Research Analyst at HEM Securities, also recommends booking partial profits and holding the remaining shares for the long term. She cites the strong historical performance of other Bajaj Group companies as a reason to hold the stock, as it could become a valuable portfolio addition.
For a more detailed breakdown of IPO allocation strategies, check our IPO Allotment Tips page.
Peer Comparison
Compared to its nearest peer, PNB Housing Finance, Bajaj Housing Finance trades at a premium:
| Company | Book Value (Post Listing) | Expected P/E Ratio | Sector Average P/E |
|---|---|---|---|
| Bajaj Housing Finance | 6-6.5x | 30x | 15x |
| PNB Housing Finance | 2x | 10x | 15x |
While Bajaj Housing Finance’s listing price is at a higher multiple, the company’s growth potential and strong fundamentals could make it a long-term hold. For upcoming IPOs and insights, visit our Upcoming IPO page.
Conclusion: Hold or Sell?
- For Long-Term Investors: Hold a portion of your shares. Bajaj Housing Finance’s strong financial performance and growth trajectory make it a solid candidate for long-term gains.
- For Short-Term Investors: Book partial profits on listing day. While the grey market premium indicates strong demand, market experts caution against overexposure due to the stock’s high valuation.
Want to explore more IPO opportunities? Visit our IPO Listing and IPO Subscription pages for the latest updates.
Disclaimer
The information provided in this blog is for educational and informational purposes only. It does not constitute financial advice or recommendations for any investment or trading activity. The views and opinions expressed are those of market experts and analysts, and they may change based on market conditions. Investors are encouraged to perform their own research or consult with a certified financial advisor before making any investment decisions. ipograymarket.com is not responsible for any financial loss incurred based on the information provided in this article.
For more information on upcoming IPOs and stock market insights, visit our IPO Review page.
