Bajaj Housing Finance IPO update:
Bajaj Housing Finance, a subsidiary of the Bajaj Group, recently filed a Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO). Promoted by Bajaj Finance Limited and Bajaj Finserv Limited, Bajaj Housing Finance is a non-deposit housing finance company active in mortgage lending since fiscal 2018.
The IPO will include a fresh share issuance amounting to ₹4,000 crore. Additionally, the parent company, Bajaj Finance Ltd, plans to sell shares worth ₹3,000 crore through an offer for sale, as outlined in the DRHP. The net proceeds from the fresh issue will be used to bolster the company’s capital base to support future business needs for onward lending. Listing the equity shares on stock exchanges is expected to enhance brand recognition and create a public market for its equity shares in India. A portion of the proceeds from the fresh issue will also cover offer expenses.
The public offer will reserve equity shares for subscription by eligible employees and owners of the promoters, including individuals and HUFs who are public equity owners of the promoters. In September 2022, the Reserve Bank of India (RBI) identified Bajaj Housing Finance as an upper-layer NBFC, with assets under management of ₹50,000 crores, requiring it to be listed by September 2025.
According to a CNBC TV18 report, Bajaj Housing Finance is a wholly-owned subsidiary of Bajaj Finance, with Bajaj Finserv holding a 51.34 percent stake in Bajaj Finance.
The Book Running Lead Managers for the offering are Kotak Mahindra Capital Company Ltd, BofA Securities India Ltd, Axis Capital Ltd, Goldman Sachs (India) Securities Private Ltd, SBI Capital Markets Ltd, JM Financial Ltd, and IIFL Securities Ltd. The DRHP lists the company’s peers as LIC Housing Finance (P/E of 7.3), PNB Housing Finance (P/E of 12.4), Can Fin Homes (P/E of 12.9), Aadhar Housing Finance (P/E of 18.7), Aavas Financiers (P/E of 3.3), Aptus Value Housing Finance (P/E of 24.6), and Home First Finance (P/E of 24.3).
For the financial year 2023-24, Bajaj Housing Finance reported a net profit of ₹1,731 crore, a 38 percent increase from ₹1,258 crore in FY23. As of March 31, 2024, home loans constituted 57.8 percent of the company’s total assets under management (AUM), down from 61.7 percent the previous year.
