India’s Bajaj Housing Finance more than doubles in debut, fetches US$16 billion valuation

Shares of Bajaj Housing Finance more than doubled in their trading debut on Monday (Sep 16), giving the company a market capitalisation of US$16 billion and making it India’s most valuable listed home loan financier.

The blockbuster listing is the latest in India’s booming IPO market that has seen over 200 companies raise more than US$7 billion this year as the stock market scales new highs.

The benchmark NSE Nifty 50 was little changed on the day after hitting a record high earlier.

The stock was listed at 150 rupees (S$2.31), a premium of 114 per cent to the offer price of 70 rupees, marking the fourth-best listing gains among mainboard initial public offerings this year. It rose as much as 135 per cent to 164.64 rupees before paring some gains.

“They’ve done better than expected and the fact that it’s almost an hour of trading and they seem to be holding on to the price, which is great,” said Arun Kejriwal, founder of Kejriwal Research.

“The entry of the company in the listing also brings the number two and three players – LIC Housing Finance and PNB Housing Finance – in focus.”

Shares of rivals LIC Housing and PNB Housing fell 3.5 per cent and 5.9 per cent, respectively, on Monday.

Bajaj Housing Finance’s US$782 million IPO, India’s largest offering so far in 2024, attracted bids worth about US$38.60 billion last week, making it the most sought-after public listing this year.

The company was targeting a valuation of US$7 billion through the IPO. The second-biggest home loan financier, HUDCO, is valued at nearly US$6 billion.

The unit of non-bank lender Bajaj Finance drew investors due to its pedigree, an ongoing IPO euphoria and booming demand for luxury homes, analysts said.

Sanjiv Bajaj, chairman of Bajaj Housing Finance, said the company’s net interest margins are likely to be stable and that he expects credit growth at 12 per cent-15 per cent in the housing finance industry, CNBC-TV18 reported. REUTERS