Bajaj Housing Finance, a major player in the housing finance sector in India, has announced its Initial Public Offering (IPO). The price range for Bajaj Housing Finance’s IPO has been set between ₹66 and ₹70 per share, with a face value of ₹10 per share. The IPO will open for public subscription on Monday, September 9, 2024, and will close on Wednesday, September 11, 2024. Before this, on Friday, September 6, 2024, the company will allocate shares to anchor investors, who are usually large institutional investors that are invited to invest in the IPO before the general public.
The IPO has a specific allocation pattern for different categories of investors. Qualified Institutional Buyers (QIBs), including entities like banks, mutual funds, and insurance companies, will receive up to 50% of the total shares. Non-Institutional Investors (NIIs), such as high-net-worth individuals, will be allocated at least 15% of the total shares. Retail investors, or regular individual investors, will have at least 35% of the shares reserved for them. This allocation structure ensures that all types of investors have the opportunity to participate in the IPO.
The schedule for share allotment is as follows: The allotment of shares will be finalized on Thursday, September 12, 2024. For those who do not receive shares, refunds will be initiated on Friday, September 13, 2024. The shares will be credited to the demat accounts of successful investors on the same day as the refund process. Bajaj Housing Finance is expected to list its shares on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on Monday, September 16, 2024.
The IPO comprises two main parts: an Offer for Sale (OFS) and a New Issue of Equity Shares. In the Offer for Sale, Bajaj Finance, the parent company of Bajaj Housing Finance, will sell shares worth ₹3,000 crore. The proceeds from this sale will go to Bajaj Finance and not to Bajaj Housing Finance. The New Issue of Equity Shares will involve Bajaj Housing Finance issuing new shares worth up to ₹3,560 crore. The money raised from this new issue will be used to support the company’s growth plans and strengthen its financial position.
The main reason behind this IPO is to comply with a rule set by the Reserve Bank of India (RBI). According to this rule, all large non-banking financial companies (NBFCs) must be listed on the stock exchanges by September 2025. As Bajaj Housing Finance is a large NBFC, it needs to list its shares to meet this regulatory requirement.
Should You Consider Investing?
Investing in the Bajaj Housing Finance IPO could be an opportunity for those looking to tap into India’s growing housing finance market. However, as with any type of investment, there are potential risks to consider. It is important to understand the details of the offer and consider factors like market conditions, the company’s growth prospects, and the overall economy before making a decision.
Bajaj Housing Finance’s IPO is a significant event in the Indian stock market, offering investors a chance to own shares in a leading housing finance company. With a clear allocation plan for different types of investors and a scheduled timeline for allotment and listing, the company is set to attract a wide range of investors. However, investors should do their own research and carefully consider the risks and rewards before deciding to invest.
This IPO not only helps the company raise funds for its growth but also fulfills a key regulatory requirement set by the RBI, making it a critical step for Bajaj Housing Finance’s future.