Bajaj Housing Finance shares witnessed a sharp 10% surge on Tuesday, 17 September, hitting the upper circuit at ₹181.5. This notable jump comes a day after its highly successful stock market debut, where the share price more than doubled, offering significant gains to IPO investors. The stock's momentum continued as PhillipCapital initiated a 'buy' rating, further boosting investor interest and setting a target price of ₹210 per share, highlighting the company's growth potential.
Strong IPO performance fuels optimism
The recent listing of Bajaj Housing Finance has been a remarkable success, delivering an impressive 135% premium on the IPO allotment price of ₹70 per share. The stock closed at ₹165 on its debut, and the latest target price of ₹210 suggests an additional 27% upside. For investors looking to invest in stocks, the company's robust performance and favourable market reception position it as a top contender for long-term growth.
PhillipCapital backs growth in the housing sector
PhillipCapital's report highlights Bajaj Housing Finance's focus on the home loan sector, particularly targeting the ₹50 lakh loan segment, which is highly desirable for many homebuyers. With this focus, the company covers about 65% of India's home loan originations, giving it a dominant market position. For investors keen to invest in stocks with strong fundamentals, Bajaj Housing Finance's strategic focus on this niche adds to its appeal.
Growth prospects and balance sheet outlook
In addition to its home loan concentration, Bajaj Housing Finance is expected to maintain a stable construction finance portfolio comprising 8-10% of its total assets. PhillipCapital estimates that within three years, the company could have a balance sheet exceeding ₹2 lakh crore. The combination of a growing balance sheet and low near-term credit costs makes it an attractive share market investment for those looking at long-term opportunities.
The IPO success story
Bajaj Housing Finance has emerged as one of the hottest IPOs of the year, with its public offer attracting bids worth over ₹3 lakh crore for the ₹6,560 crore issue. This marks the largest-ever subscription amount for an Indian IPO, underlining the high investor interest. As a result, the company's market capitalisation has soared to ₹1.37 lakh crore, far exceeding the ₹58,297 crore valuation based on its IPO price. Investors who participated in the IPO are advised to hold their shares to maximise the potential for future growth.
Long-term outlook for investors
Analysts believe that Bajaj Housing Finance's strong fundamentals, coupled with the promising outlook for India's housing finance sector, make it a solid choice for those looking to invest in stocks. With the company's continued growth prospects, investors are encouraged to maintain a long-term perspective, avoiding short-term gains. For those who missed out on the IPO, cautious buying is advised, aligning investments with personal risk tolerance and market conditions.
Compliance with regulatory requirements
The Bajaj Housing Finance IPO comprised both a fresh issue of ₹3,560 crore and an offer-for-sale (OFS) by Bajaj Finance, totalling ₹3,000 crore. This share sale was conducted to meet the Reserve Bank of India's (RBI) listing requirements for upper-layer non-banking finance companies, which must be listed on stock exchanges by September 2025. Investors eyeing regulatory-compliant companies may find this an appealing opportunity to invest in stocks with strong governance.
In summary, Bajaj Housing Finance's remarkable stock performance, combined with the recent 'buy' rating and target price upgrade, makes it a highly attractive option for those looking to invest in stocks for long-term returns.
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