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Bajaj Housing Finance – a diversified play on Indian housing finance market, Recommend Subscribe

ICICIdirect Research 06 Sep 2024 DISCLAIMER

Bajaj Housing Finance is a subsidiary of Bajaj Finance engaged primarily in housing finance is coming up with an IPO raising ₹ 6560 crore, comprising fresh issue of ₹ 3560 crore and OFS of ₹ 3000 crore. Bajaj Housing Finance IPO price band is between ₹ 66 to 70 for each share. Subscription will be open from 9 – 11 September 2024 with listing expected on 16 September 2024.

Bajaj Housing finance is engaged in individual home loans (prime category), loan against property, lease rental discounting and developer finance. With an AUM of ₹97071 crore (as of June 2024), Bajaj Finance remains one of the fastest growing HFCs. Healthy growth (25-35%), diversified asset mix to deliver strong margins, superior return ratios (RoA at 2.2-2.5%) and best in class asset quality (GNPA – 0.28% as of June 2024) remains core strengths of the business.

At upper price of the band, the lender is available at ~3.2x current BV, which seems to be reasonable given outlook on growth and sustained profitability. Thus, we remain positive on the future prospects and recommend subscribing for the IPO.

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