Bajaj Housing Finance Shares Drop 6% as IPO Lock-in Period Ends

Bajaj Housing Finance Shares Drop 6% as IPO Lock-in Period Ends

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Bajaj Housing Finance’s share price dropped 6% on December 12, 2024, reaching a two-week low of ₹132.80. This decline coincides with the end of the three-month IPO lock-in period, releasing 12.5 crore shares for sale in the secondary market.

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Key Highlights:

  • Lock-in Period Expiry: The release of 12.5 crore shares, amounting to 2% of Bajaj Housing Finance’s outstanding equity, marked the end of the lock-in period for pre-IPO investors.
  • Listing Journey: Shares debuted at ₹150, a 114.3% premium over the IPO price of ₹70, and reached a record high of ₹188 before experiencing fluctuations.
  • Recent Trends: Despite a dip to ₹125 in November, the stock partially recovered, rising by 8% since its low.

Company Overview:

Bajaj Housing Finance, a subsidiary of Bajaj Finance, is a non-deposit-taking housing finance company registered with the National Housing Bank since 2015.

It began offering mortgage loans in FY18 and achieved a significant milestone in Q2 FY25, with its Assets Under Management (AUM) surpassing ₹1 lakh crore.

Q2 FY25 Financial Performance:

  • AUM: Grew to ₹1.02 lakh crore, up from ₹81,125 crore year-on-year.
  • Disbursements: Reached ₹12,014 crore in Q2 FY25, consistent with the ₹12,154 crore in Q2 FY24.
  • Profit After Tax (PAT): Climbed to ₹546 crore, up from ₹451 crore in Q2 FY24.
  • Operational Efficiency: Opex to NTI improved to 20.5%, compared to 22.1% in Q2 FY24.

Strategic Strengths:

  • Prominent Backing: Bajaj Housing Finance is part of the Bajaj Group, known for its diversified portfolio that includes Bajaj Finance and Bajaj Auto.
  • Strong Liquidity Buffer: The company maintained ₹3,220 crore in liquidity and a robust coverage ratio of 220.9%, exceeding the regulatory requirement of 85%.
  • Operational Resilience: Focused on improving efficiency and maintaining steady disbursements, even amid market volatility.

Challenges Ahead:

While Bajaj Housing Finance’s growth trajectory is strong, broader market volatility and the influx of shares post-lock-in could add short-term pressure on its stock price.

Investors may need to keep a close watch on market movements and operational updates.

Should You Invest?

Bajaj Housing Finance’s long-term fundamentals remain solid, supported by its affiliation with the Bajaj Group and consistent financial performance.

However, potential investors should consult certified financial advisors and evaluate their risk tolerance before making investment decisions.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always consult certified experts before making investment decisions.

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