Shares of this NBFC, which provides a range of housing finance products, reached a 52-week high and hit the 10 percent upper circuit limit at Rs.181.48 per share on the second day after its listing in the securities market.
Share Price Variation
In Tuesday’s trading session, Bajaj Housing Finance Ltd.’s share price hit a 52-week high of Rs.181.48, marking a 10 percent increase from its previous close of Rs.164.99. The price has since eased and is currently trading at Rs.180.66 per share.
Listed on Monday, the shares delivered a 135 percent return and are anticipated to continue growing with similar potential.
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What happened
Following Bajaj Housing Finance’s blockbuster listing on September 16, investors who missed the IPO allotment or the opportunity to apply might be considering buying the shares now. Experts recommend cautious buying for long-term growth, taking into account each investor’s risk tolerance.
Phillip Capital, a Singapore-based investment and wealth management firm, has given a ‘buy’ rating to Bajaj Housing Finance Ltd., setting a target price of Rs.210 per share. This indicates a potential upside of 17 percent from the current market price.
Phillip Capital sees strong prospects for Bajaj Housing Finance, emphasizing its focus on the Rs.50 lakh home loan segment, which represents 65 percent of India’s home loan market.
The brokerage anticipates the balance sheet will exceed Rs.2 lakh crore within three years. Near-term credit costs are expected to remain manageable, bolstering the company’s growth outlook.
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Analysts Recommendation
Narendra Solanki, Head of Equity Research (Fundamental) at Anand Rathi Shares & Stock Brokers, stated that the company’s overall fundamentals and outlook are strong, with expectations for continued healthy growth and an improved return profile.
He advised that investors adding the stock on the listing day should adopt a long-term perspective on Bajaj Housing Finance and not focus on short-term opportunities.
Financials
According to the DRHP filing of the company, Bajaj Housing Finance reported net interest income for FY24 as Rs.7,202.4 crore, 36.7 percent more than Rs.5,269.3 crore in FY23. The total comprehensive income for the year 2024 constituted Rs.1,730.3 crore, rising 37.11 percent from Rs.1,261.9 crore.
Peer Competition
LIC Housing Finance is the largest player in India, whereas Bajaj Housing Finance is the second-largest. Comparing the top two housing finance companies, LIC Housing Finance and Bajaj Housing Finance reveals distinct profiles.
As of June 2024, LIC Housing Finance leads with Rs.2,88,665 crore in Assets Under Management (AUM), while Bajaj Housing Finance has Rs.97,071.3 crore.
In Q1 FY25, LIC Housing Finance reported a Net Interest Income of Rs.6,783.69 crore, compared to Rs.2,208.65 crore for Bajaj Housing Finance.
LIC Housing Finance maintains stable performance with a lower valuation, while Bajaj Housing Finance shows strong profit growth, with an expected Return on Equity (RoE) exceeding 12 percent for FY25-27.
Company Profile
Bajaj Housing Finance, a non-deposit-taking housing finance company registered with the National Housing Bank since September 2015, offers financial solutions for buying and renovating residential and commercial properties.
Classified as an “upper layer” NBFC by the RBI, it provides various mortgage products, including home loans, loans against property, lease rental discounting, and developer financing.
Written by – Siddesh S Raskar
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