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Here we will try to answer all the important questions, so that you can make the right investment decision.
Bajaj Housing Finance IPO
Bajaj Housing Finance’s IPO was brought in the price band of Rs 66 to Rs 670 per share. On this basis, this share has been allotted at Rs 770. It is going to be listed on September 16.
Grey Market Premium Status
Bajaj Housing Finance shares are trading at a premium of Rs 149-150 in the grey market, which indicates that this stock can double your capital on the first day of listing. If it lists at a premium of Rs 149-150, what should you do?
What to do after listing?
If you have got an IPO and are wondering whether to sell or hold the stock after listing, it completely depends on your financial strategy and risk profile. It is always better to consult your financial advisor before making any investment decision.
However, based on my experience, let me share my strategy. When a company lists an IPO, it aims to maximize its market cap. The current market cap of Bajaj Company is Rs 58,297 crore. If this stock lists at Rs 149-150, its market cap can double, taking it to Rs 1.25 lakh crore.
Compared to other housing finance companies
The major competitors of Bajaj Housing Finance in the market are big companies like LIC Housing Finance and PNB Housing Finance. The market cap of LIC Housing Finance is less than Rs 30,000 crore, while the market cap of PNB Housing Finance is around Rs 20,000 crore. Similarly, the market cap of other companies like Aadhar Housing Finance and Aavas Finance is also low.
If we talk about the financial performance of Bajaj, the company reported sales of Rs 2200 crore and a profit of Rs 483 crore in the June 2024 quarter. While PNB Housing Finance posted a profit of Rs 439 crore and LIC Housing Finance earned a profit of Rs 1300 crore. It is clear from this comparison that the profit margin of Bajaj Housing Finance is lower than other companies.
Is it right to invest now?
The current valuation of Bajaj Housing Finance is at 33 P/E, while LIC Housing Finance is available at 8 P/E. This means that Bajaj Housing Finance is valued at eight times more than LIC Housing Finance. For this reason, I would not recommend buying this stock at this time.
However, if this stock comes to Rs 100-120 level, I will consider investing in it. The stock is likely to fall once the market excitement ends.
Conclusion
IPO can be a great opportunity, but its valuation is quite high at this time. If you are a long-term investor and you are looking for a good valuation, then you should wait. If you are a short-term trader, then you can book listing gains.
What is your view? Have you been allotted IPO and what are you going to do? Share your views with us and share this information with your friends who are confused about investing in this IPO.
FAQ: Bajaj Housing Finance IPO Listing
1. When is the Bajaj Housing Finance IPO listing?
The IPO of Bajaj Housing Finance is scheduled to be listed on 16th September 2024.
2. What is the IPO price band for Bajaj Housing Finance?
The IPO price band was set between ₹660 to ₹670, with the cutoff price being ₹670 per share.
3. What is the expected listing price?
Based on the Grey Market Premium (GMP), the expected listing price is around ₹149 to ₹150.
4. Should I sell or hold the Bajaj Housing Finance stock post-listing?
It depends on your financial goals and market conditions. It is recommended to consult with a financial advisor before making any decision. The video suggests that holding for the long term may be better if the stock price corrects to a lower range.
5. What if I was not allotted the IPO? Should I buy it after listing?
If you weren’t allotted the IPO shares, you can still buy them after listing. However, the video advises caution, suggesting waiting for a price correction to a more reasonable valuation around ₹120 to ₹130.
6. What is the current Grey Market Premium (GMP) for the Bajaj Housing Finance IPO?
As of the video, the GMP is around ₹149 to ₹150, indicating a strong premium over the issue price.
7. How does Bajaj Housing Finance compare to its peers in the housing finance sector?
Bajaj Housing Finance, with a market cap expected to reach ₹1,25,000 crore post-listing, outperforms many of its peers in terms of valuation. However, its financial performance (sales and profits) is comparable to other established companies like LIC Housing Finance and PNB Housing Finance.
8. Is Bajaj Housing Finance overvalued compared to its competitors?
The video suggests that the stock might be overvalued at the expected listing price, especially when compared to peers like LIC Housing Finance, which trades at a lower Price-to-Earnings (P/E) ratio despite stronger financials.
9. What is the financial performance of Bajaj Housing Finance in recent quarters?
In June 2024, Bajaj Housing Finance posted sales of ₹2200 crore and profits of ₹483 crore, showing moderate growth compared to the previous year.
10. Is it a good idea to invest in Bajaj Housing Finance for the long term?
The expert in the video suggests avoiding jumping into the stock at high valuations. It’s better to wait for a correction around ₹120 to ₹130 for long-term accumulation.
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