 "Bajaj Housing Finance IPO buzz: GMP leapfrogs 80%; 5 key takeaways from RHP")
Bajaj Housing Finance IPO: India's second-largest housing finance company, Bajaj Housing Finance, a wholly owned subsidiary of Bajaj Finance, has filed its Red Herring Prospectus (RHP) for an Initial Public Offering (IPO) to raise nearly Rs 6,650 crore.
This would be among one of the largest IPOs of the year, along with Ola Electric Mobility, and Bharti Hexacom, which have already made their debuts on the bourses.
Adding to the buzz, the shares of Bajaj Housing Finance have already started commanding a strong premium in the grey markets ahead of its opening, scheduled for Monday, September 9, 2024. Sources tracking grey market activities reveal that Bajaj Housing Finance shares are trading at a grey market premium (GMP) of Rs 56 or 80 per cent, reflecting favourable market sentiment for the public issue of Bajaj Finance's subsidiary.
Before the Bajaj Housing Finance IPO opens for subscription, here are the key takeaways from the RHP papers that investors should be aware of:
Bajaj Housing Finance IPO issue size
With this IPO, Bajaj Housing Finance is offering a fresh issue of 937,142,858 shares worth around Rs 6,560 crore, as well as an offer for sale with Bajaj Finance, the promoter of the company, offloading up to 508,571,429 shares with a face value of Rs 10 apiece, aggregating up to Rs 3,560 crore, as per the Red Herring Prospectus.
Bajaj Housing Finance IPO will be available at a price band of Rs 66-70 with a lot size of 214 shares. Accordingly, investors can bid for a minimum of 214 shares and in multiples thereof. The minimum amount required to bid for the Bajaj Housing Finance IPO by retail investors is Rs 14,980.
Bajaj Housing Finance IPO objective
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According to the RHP, Bajaj Housing Finance proposes to utilise the net proceeds from the fresh issue towards augmenting its capital base to meet future business requirements of the company towards onward lending. "In addition, the Company expects to receive the benefits of listing the Equity Shares on the Stock Exchanges, including enhancement of our Company’s brand name and creation of a public market for our equity shares in India. Further, a portion of the proceeds from the Fresh Issue will be used towards meeting offer expenses," said Bajaj Housing Finance in the RHP papers.
Furthermore, the company in its RHP papers revealed that the Promoter Selling Shareholder shall be entitled to the proceeds of the offer for sale after deducting its proportion of offer expenses and relevant taxes thereon. Bajaj Housing Finance will not receive any proceeds from the Offer for Sale, and the proceeds received from the offer for sale will not form part of the net proceeds.
Bajaj Housing Finance financials
As per the details available in the RHP papers, the total revenue from operations for Bajaj Housing Finance stood at Rs 2,208.65 crore for the quarter ended June 30, 2024. It stood at Rs 76,173.1 crore for FY24 and Rs 5,664.73 crore for FY23.
Bajaj Housing Finance's profit after tax for the period ended June 30, 2024, was reported at Rs 482.61 crore, while it stood at Rs 1,731.22 crore for FY24, and Rs 1,257.80 crore for FY23. The company’s total comprehensive income for the period ended June 30, 2024, was reported at Rs 483.24 crore, while for FY24 it stood at Rs 1,730.31 crore, and Rs 1,261.95 crore for FY23.
Bajaj Housing Finance IPO timeline
The public issue of Bajaj Housing Finance will be available for subscription from Monday, September 9, 2024, to Wednesday, September 11, 2024.
Following the closure of the subscription window, the basis of allotment of the company’s shares is scheduled for Thursday, September 12, 2024. Accordingly, the shares of Bajaj Housing Finance will be credited into demat accounts on Friday, September 13, 2024.
Bajaj Housing Finance shares are scheduled to make their debut on the bourses on Monday, September 16, 2024, by listing on the BSE and NSE.
Bajaj Housing Finance IPO registrar details
As per the RHP papers, Kfin Technologies is the registrar for the issue. For the public issue, the company has appointed Kotak Mahindra Capital, BofA Securities India, Axis Capital, Goldman Sachs (India) Securities, SBI Capital Markets, JM Financial, and IIFL Securities as the book-running lead managers.
About Bajaj Housing Finance
Bajaj Housing Finance is a non-deposit-taking Housing Finance Company, registered with the National Housing Bank since September 24, 2015, and engaged in mortgage lending since Fiscal 2018. The company is part of the Bajaj group, which was founded in 1926 and is a diversified business group with interests across various sectors. "As of June 30, 2024, we had 323,881 active customers, 83.2 per cent of whom were home loan customers. Our overall loan disbursements were Rs 12,003.51 crore, Rs 10,382.52 crore, Rs 44,656.24 crore, and Rs 34,333.63 crore, in the three months ended June 30, 2024, June 30, 2023, and Fiscals 2024, 2023, and 2022, respectively," reads the RHP papers.