Bajaj Housing Finance IPO gmp

Bajaj Housing Finance IPO Subscription Status Day 3: Overview and Key Insights

On the final day of bidding for Bajaj Housing Finance’s Initial Public Offering (IPO), there has been a massive surge in demand, particularly from non-institutional wealthy investors and retail investors. As of 11:06 a.m. on the last day, the IPO has been oversubscribed by more than 10 times, with the portion allocated for non-institutional investors (NIIs) being oversubscribed by 24 times, and the Qualified Institutional Buyers (QIBs) portion by 11 times. Retail Individual Investors (RIIs) also showed significant interest, subscribing over 5 times.

The public issue size stands at Rs 6,560 crore, with a fresh issue of equity shares amounting to Rs 3,560 crore and an offer-for-sale (OFS) of Rs 3,000 crore by its parent company, Bajaj Finance. The IPO was launched to help Bajaj Housing Finance meet regulatory requirements set by the Reserve Bank of India (RBI), which mandates non-banking finance companies (NBFCs) to be listed on stock exchanges by September 2025. The company has already raised Rs 1,758 crore from anchor investors ahead of the public issue.

GMP Surge on the Last Day

The Grey Market Premium (GMP) for Bajaj Housing Finance IPO surged to around Rs 65, showing a premium of over 92% on the last day of subscription. This highlights strong demand for the company’s shares in the unlisted market, suggesting that investors have high expectations from the IPO.

Advantages of Bajaj Housing Finance IPO

Strong Market Demand: The IPO has seen overwhelming interest from all types of investors, including institutional, non-institutional, and retail investors. This high demand indicates confidence in the company’s future performance.
GMP Premium: The significant surge in the Grey Market Premium (GMP) to Rs 65, reflecting a premium of 92%, suggests strong market sentiment and potential listing gains for early investors.
Anchor Investors’ Confidence: The company has already secured Rs 1,758 crore from anchor investors, indicating strong backing from institutional investors and further boosting confidence in the IPO.
Compliance with RBI Regulations: By listing on stock exchanges, Bajaj Housing Finance ensures compliance with the RBI’s regulatory requirements, improving its market standing and making it a safer investment option.
Capital Base Augmentation: The fresh issue of equity shares will help the company bolster its capital base, positioning it well to meet future capital requirements and enabling growth.

Disadvantages of Bajaj Housing Finance IPO

High Subscription Levels: Although the high subscription levels reflect strong demand, they also reduce the chances of allotment for smaller retail investors, which might lead to disappointment for some.
Market Volatility: Like any IPO, Bajaj Housing Finance is exposed to stock market volatility. Despite the current strong demand, any downturn in the broader market could affect the stock’s listing price and future performance.
Dilution of Shareholding: The offer-for-sale (OFS) of Rs 3,000 crore by the parent company, Bajaj Finance, may dilute the shareholding of existing investors, which could lead to some concerns about future control.
Sector-Specific Risks: As a non-banking finance company, Bajaj Housing Finance is exposed to sector-specific risks, including changes in interest rates, regulatory shifts, and economic downturns, which could impact its profitability.
Uncertainty Around IPO Performance: While the Grey Market Premium is high, it is an informal market indicator. There is no guarantee that the stock will perform equally well post-listing, and it may face selling pressure.

Conclusion

The Bajaj Housing Finance IPO has garnered significant attention from all classes of investors, particularly on the last day of bidding. With the IPO oversubscribed more than 10 times, it shows that there is strong investor confidence in the company’s future. The surge in the Grey Market Premium (GMP) and the significant backing from anchor investors further enhance the positive sentiment around this IPO.

Despite its strong potential, it is important for investors to consider both the opportunities and risks associated with this public issue. High demand may result in limited stock allotment, and the company’s future success will be tied to how well it manages its risks in a challenging sector.

FAQs

1. What is the current subscription status of Bajaj Housing Finance IPO?

As of the last day of bidding, Bajaj Housing Finance IPO has been oversubscribed by more than 10 times, with strong participation from non-institutional investors, institutional investors, and retail investors.

2. What is the Grey Market Premium (GMP) for Bajaj Housing Finance IPO?

The Grey Market Premium (GMP) for Bajaj Housing Finance IPO surged to around Rs 65 on the last day, indicating a premium of over 92%.

3. How is the IPO allocated between different types of investors?

Non-institutional investors: Oversubscribed nearly 24 times.
Qualified Institutional Buyers (QIBs): Subscribed around 11 times.
Retail Individual Investors (RIIs): Subscribed over 5 times.

4. How will the proceeds from the IPO be used?

The proceeds from the fresh issue of equity shares will be used to augment the company’s capital base, helping Bajaj Housing Finance meet future capital requirements.