Bajaj Housing Finance IPO Kicks Off Today: Key Details and Subscription Insights

Bajaj Housing Finance Limited (BHFL), a major player in India's housing finance sector, is set to launch its Initial Public Offering (IPO). On Friday, September 6, BHFL announced that it has secured Rs.1,758 crore from anchor investors ahead of its public share sale.

IPO Subscription Period

The public subscription for the BHFL IPO starts today, September 9, and will end on September 11. The shares are priced between Rs.66 and Rs.70 each. The IPO will allocate up to 50% of the shares for qualified institutional buyers (QIBs), 15% for non-institutional investors (NIIs), and at least 35% for retail investors.

Shareholders' Quota

Additionally, BHFL has reserved equity shares worth up to Rs.500 crore for existing shareholders, including individuals and Hindu Undivided Families (HUFs) who own shares in the company's promoters. This special quota is a common feature in IPOs of companies with listed parent firms, aimed at benefiting loyal shareholders.

Company Background

Bajaj Housing Finance, a non-deposit housing finance company, has been providing mortgage loans since 2018. It is a subsidiary of Bajaj Finance Ltd, which in turn is driven by Bajaj Finserv Ltd. Bajaj Finserv holds a 51.34% stake in Bajaj Finance.

Initial Subscription Performance

As of the first day of subscription, the IPO has been 7% subscribed. BSE data shows that bids have been received for 5,42,96,936 shares out of the 72,75,75,756 shares available. The retail investor segment is 9% subscribed, while the non-institutional investor segment is 18% subscribed. The quota for qualified institutional buyers (QIBs) has not yet been filled, and the employee portion is 1% subscribed. The shareholders' quota is 5% subscribed.

IPO Structure and Purpose

The BHFL IPO includes an offer for sale (OFS) of equity shares by the parent company Bajaj Finance amounting to Rs.3,000 crore, and a new issue of equity shares up to Rs.3,560 crore. The proceeds from the new shares will be used to expand the company’s capital base and comply with the Reserve Bank of India's (RBI) directive for higher-layer non-banking financial companies (NBFCs) to list on stock exchanges by September 2025.

Book Running Lead Managers

The book-running lead managers for the IPO are Axis Capital Ltd, Goldman Sachs (India) Securities Pvt Ltd, SBI Capital Markets Ltd, JM Financial Ltd, IIFL Securities Ltd, and Kotak Mahindra Capital Company Ltd.

Grey Market Premium

As of today, the Grey Market Premium (GMP) for BHFL shares is Rs.56, indicating that the shares are trading at a premium in the unofficial market.

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This suggests a strong potential for the shares to list higher than the IPO price of Rs.70. Analysts on investorgain.com note that the GMP ranges between Rs.36 and Rs.60, reflecting positive sentiment among investors.