Bajaj Housing Finance Eyes Rs 7,000 Crore With September IPO

Shares of Bajaj Finance and Bajaj Finserv saw a 3% rise on August 29, 2024, amid reports that Bajaj Housing Finance might launch its IPO in early September 2024. The company aims to raise Rs 7,000 crore through this public issue.

Bajaj Housing Finance IPO Details

The IPO will consist of a Rs 4,000 crore fresh issue and a Rs 3,000 crore offer-for-sale. Shareholders of Bajaj Finserv and Bajaj Finance will have a special quota in this offering. Bajaj Finance owns 100% of Bajaj Housing, while Bajaj Finserv holds a 51.34% stake in Bajaj Finance.

Bajaj Housing Finance has already filed its draft red herring prospectus (DRHP) with SEBI for the Rs 7,000-crore IPO. This move complies with the Reserve Bank of India's rules requiring upper-layer non-banking finance companies to list on stock markets by September 2025.

Market Response and Financials

Despite the price band not being announced yet, Bajaj Housing Finance is commanding a grey market premium of Rs 41 in unlisted markets. The company plans to use the net proceeds from the fresh issue to strengthen its capital base for future business needs and cover offer expenses.

As of March 2024, Bajaj Housing Finance's assets under management (AUM) stood at Rs 9.14 lakh crore, growing at an annualised rate of 30.9% between FY22 and FY24. The average ticket size for home loans is Rs 46 lakh with an average loan-to-value ratio of 70.5% as of March 31.

Lead Managers and Registrar

Kotak Mahindra Capital, BofA Securities India, Axis Capital, Goldman Sachs (India) Securities, SBI Capital Markets, JM Financial, and IIFL Securities are the book-running lead managers for the IPO. KFin Technologies is acting as the registrar to the issue.

Bajaj Housing Finance serves over 76.5 million customers across India, offering loans for home purchases and renovations to both individuals and corporate entities. Based in Pune, it provides diversified financial services catering to various customer needs.

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