Bajaj Housing Finance, newly listed on the stock exchange, saw its shares decline by 5.7%, hitting an intraday low of ₹171.16. This drop after a two-day surge after listing at a 114.28% premium to the issue price of ₹70.
Investors moved to book profits, according to market experts like Ambareesh Baliga, who saw the correction after multiple upper circuits as a healthy sign.
At 11:04 AM, the stock traded down 4.4% at ₹173.5, while the BSE Sensex gained 177 points, indicating broader market resilience.
Market analyst Vikas Sethi remarked on the stock’s high valuation compared to benefits, saying that profit-taking was not avoidable after the IPO boom. On the other hand, analysts at PhillipCapital gave Bajaj Housing Finance its first ‘Buy’ rating with a price target of ₹210, highlighting the strong return ratios of company.
They highlighted the cost-efficiency of the company because of its focus on salaried customers (90% of loans) and synergy with Bajaj Finance (40% of loans from its parent company).
Despite the drop, Bajaj Housing Finance remains India’s largest housing finance company, valued at ₹1.37 trillion. Its IPO, the largest-ever in terms of subscription, increased ₹6,560 crore through a new issue and demand for sale.
Post-IPO, Bajaj Finance’s stake in the company dropped to 88.75%, valuing its remaining holding at ₹1.22 trillion.
While short-term volatility has placed in, analysts think the stock has long-term growth prospect, mainly given the strong fundamentals and market leadership of the company.
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Disclaimer
This article is for informational purposes only and should not be considered financial advice. Please consult a professional before making any investment decisions.
