Bajaj Housing Finance Shares Soar on BSE Debut
Mumbai (Maharashtra) [India], September 16: Bajaj Housing Finance made a remarkable debut on the Bombay Stock Exchange (BSE) on Monday. The shares listed at Rs 150, which is a 114.2% premium 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. Shriram Subramanian, Founder and MD of InGovern Research Services, said, “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.”
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, emphasizing the company’s strong fundamentals and its standing as one of the most stable non-banking financial companies (NBFCs) in India. Vijay Chopra, a stock market expert, said, “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.”
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.
Doubts Revealed
Bajaj Housing Finance -: Bajaj Housing Finance is a company in India that provides loans for buying homes. It is part of the Bajaj Group, which is a big business group in India.
BSE -: BSE stands for Bombay Stock Exchange. It is a place where people can buy and sell shares of companies. It is one of the oldest stock exchanges in Asia.
Shares -: Shares are small parts of a company that people can buy. When you own shares, you own a part of that company.
Debut -: Debut means the first time something happens. In this case, it means the first time Bajaj Housing Finance’s shares were available to buy on the stock exchange.
Premium -: Premium here means the amount by which the share price is higher than the original price. For example, if the original price was Rs 70 and it is now Rs 150, the premium is Rs 80.
Issue price -: Issue price is the price at which the shares were first sold to the public. For Bajaj Housing Finance, this price was Rs 70.
Valuation -: Valuation is the process of determining how much a company is worth. High valuation means the company is considered to be very valuable.
IPO -: IPO stands for Initial Public Offering. It is when a company sells its shares to the public for the first time.
Fresh shares -: Fresh shares are new shares that a company creates and sells to raise money. This money is used for the company’s needs.
Offer-for-sale -: Offer-for-sale means existing shareholders sell their shares to the public. The money from these sales goes to the shareholders, not the company.
Subscribed -: Subscribed means how many times people wanted to buy the shares compared to how many shares were available. If it is subscribed 63.61 times, it means there was a lot of demand for the shares.
Fundamentals -: Fundamentals refer to the basic financial health and performance of a company. Strong fundamentals mean the company is doing well financially.