Bajaj Housing Finance’s 12.6 cr shares free for trade as anchor investor lock-in ends today; here’s how stock reacted

Shares of Bajaj Housing Finance were reeling under selling pressure on Thursday as the 3-month lock-in period for anchor investors to end today. Around 12.6 crore shares, representing 2% of the total equity shares of the firm, will be available for trade in the secondary market. However, it’s important to note that not all of these shares will be offloaded by investors.

Paring previous session gains, Bajaj Housing Finance shares declined as much as 6.2% to ₹132.55, while the market capitalisation slipped to ₹1.1 lakh crore. On Wednesday, the stock ended 0.89% higher at ₹141.40 on the BSE.

At the day’s low level, shares of Bajaj Housing Finance trade 30% lower than its all-time high of ₹188.45 touched on September 18, 2024. The counter touched its lowest level of ₹125.30 on November 21, 2024.

Bajaj Housing Finance Limited (BHFL), a subsidiary of Bajaj Finance Limited, made its debut on the stock market on September 16 after raising ₹6,560 crore via initial public offering at a issue price of ₹70 per share. At the current level, the counter is 100% higher from its IPO price.

The IPO of BHFL, which was the first public offering by Bajaj Group in 20 years, garnered a record-breaking response from investors. The issue was subscribed 67.43 times, with the IPO receiving record number of applications (88.94 lakh) and bids worth ₹3.24 lakh crore at the upper end of the price band of ₹66-70 per share. This was the first time in 16 years that any company has topped ₹2 lakh crore marks in subscription amounts after Coal India in 2008.

The IPO of Bajaj Housing Finance comprised a fresh issue of ₹3,560 crore and an offer for sale of ₹3,000 crore by parent Bajaj Finance. The housing finance company intends to use the net proceeds from the issuance of fresh equities to augment its capital base to meet future business requirements of the company towards onward lending.

Post listing, Phillip Capital assigned a first ‘Buy’ rating to the stock, with a target price of ₹210, saying that Bajaj Housing Finance is in a “league of its own" with a ticket size of ₹50 lakh being the "sweet spot for many home loan aspirants". With this ticket size, the company is catering to around 65% of all home loan originations in India.

The brokerage in its report said Bajaj Housing Finance is likely to have a balance sheet of ₹2 lakh crore in the next three years, adding that credit costs to remain benign in the near-term. The company is expected to focus on building a low-risk balance sheet, which is likely to lead to a Return on Assets (RoA) of over 2% and Return on Equity (RoE) of around 12%, it said.

For Q2 FY25, BHFL reported a 21% year-on-year (YoY) rise in net profit at ₹545.6 crore as compared to ₹451.1 crore in the second quarter that ended September 30, 2023. The revenue from operations rose 21.1% to ₹2,410 crore against ₹1,911.5 crore in the year-ago period.

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