Since September 9th, Bajaj Housing Finance IPO has been the talk of the town among stock players who had majorly positive but mixed reviews. As of today, September 11th, the IPO has closed with an impressive Grey Market Premium (GMP) of around 104%—a figure that’s exceptionally high!
What does it mean, what can you expect if you are a long-term investor, or just applied for listing gains? How many people subscribed? Let’s explore the details, including the subscription numbers and what you can expect moving forward.
Bajaj Housing Finance IPO – Oversubscription
With Bajaj Finance, being the 100% holding company of Bajaj Housing Finance, it’s no wonder that their IPO is oversubscribed. But the numbers are a huge deal here. The facts state that Bajaj Housing Finance IPO gets bids worth over ₹3 lakh crore for a ₹6,560 crore issue!
You can read more on the terms of Bajaj Housing Finance IPO in our earlier article: https://biznetduniya.com/bajaj-housing-finance-ipo/
The Insanely High GMP for Bajaj Housing Finance IPO
The Grey Market Premium (GMP) for the Bajaj Housing Finance IPO closed at ₹73, with a price band set between ₹66-₹70. This reflects a GMP percentage of 104.29%, indicating an estimated listing price of ₹143.
With such a significant premium, this IPO could be a golden opportunity for those fortunate enough to receive share allotments.
Are You a Long-Term Investor or a Quick Listing Gain Seeker?
- Long-Term Investor: Experts advise long-term investors to hold this IPO for at least 6 to 7 years due to its strong growth potential, driven by the increasing demand in the real estate sector. By targeting salaried employees, Bajaj Housing Finance keeps its Non-Performing Assets (NPA) low, making it an attractive long-term investment.
- Listing Gains: The high GMP suggests that you could see impressive short-term profits from this IPO. While the GMP is just an estimate and the actual listing price might be a bit lower, you’re still likely to make a decent gain from the Bajaj Housing Finance IPO.
Don’t Overlook the Risk Factors
Though Bajaj Housing Finance IPO seems polished and shiny, the following risk factors are not to be overlooked. Especially you – a long-term investor (watch it closely).
- RBI Regulations – Being a Finance company, Bajaj Housing Finance has to abide by the rules of RBI and they are known to directly or indirectly affect the company’s profit.
- RBI Repo Rates – The RBI plays a big role in setting housing loan interest rates in India. When the RBI changes its benchmark rates, housing finance companies follow suit, adjusting their loan rates up or down based on those changes, which again is a determining factor in profit computation.
- Strong Competitive Players in the Market – Established players like ICICI Bank, Axis Bank, and HDFC Bank, along with NBFCs such as LIC, Tata Capital, and PNB Housing Finance, are commanding a significant share of the market. Their robust presence and extensive experience make the competition particularly intense.
- Volatility in Housing Finance: Bajaj Housing Finance majorly focuses on Housing loans (other products being- Loan against property, Development finance, Lease Renting Discounting). Hence if the real estate market is adversely affected, we can expect the same in the Housing finances industry.
Conclusion
The Bajaj Housing Finance IPO, with its sky-high GMP and overwhelming oversubscription, certainly stands out in the current market. For long-term investors, this IPO presents a golden opportunity to tap into the growth potential of a company poised for future success in the booming real estate sector. With its low NPA and focus on salaried employees, Bajaj Housing Finance seems like a strong contender for steady returns over the years.
However, don’t be swayed by the dazzling numbers alone. Keep a keen eye on the risk factors: RBI regulations, fluctuating repo rates, fierce competition, and market volatility in the housing finance sector could impact your returns. Balancing your excitement with caution will be key to navigating this investment.
What’s your take on this high-profile IPO? Are you gearing up for long-term gains or eyeing quick listing profits? Share your thoughts and join the conversation—let’s unravel the potential and pitfalls of the Bajaj Housing Finance IPO together!
