Bajaj Housing Finance files ₹7,000 crore IPO draft with SEBI

Bajaj Housing Finance files DRHP with SEBI for IPO: Recently on June 7, Bajaj Housing Finance, a subsidiary of Bajaj Group with backing from Bajaj Finance Limited and Bajaj Finserv Limited, lodged a Draft Red Herring Prospectus (DRHP) for a future IPO. Bajaj Housing Finance, a mortgage lending company, has been involved in mortgage lending since the fiscal year 2018 and does not take deposits.

The new share issuance in the public offer totals Rs 4,000 crore. As per the DRHP, Bajaj Finance Ltd's parent company would offer for sale shares worth an extra Rs 3,000 crore.

The company's goal is to utilize the funds raised from the new offering to grow its capital base in order to meet its future business needs for lending purposes. Moreover, the company seeks to take advantage of having its shares traded on stock markets, which can lead to higher brand visibility and the creation of a public market for its shares in India. Moreover, some of the funds raised from the Fresh Issue will be used to pay for the offer costs.

The public offer consists of setting aside equity shares for eligible employees to subscribe to, along with a reserve valued at Rs 10 each for eligible Promoters' owners, including individuals and HUFs who are public equity owners of the Promoters.

In September 2022, the Reserve Bank of India (RBI) released a roster of high-tier NBFCs, or companies with assets totaling Rs 50,000 crores. As per the criteria set by RBI, Bajaj Housing Finance, which was included in the list, was scheduled to be listed on the stock exchanges in September 2025.

Bajaj Housing Finance is completely owned by Bajaj Finance. Bajaj Finance is owned by Bajaj Finserv, with a 51.34 percent stake.

 BofA Securities India Ltd, Goldman Sachs (India) Securities Private Ltd, Kotak Mahindra Capital Company Ltd, Axis Capital Ltd, SBI Capital Markets Ltd, JM Financial Ltd, and IIFL Securities Ltd are the Book Running Lead Managers appointed for the offering.

According to the DRHP, the company's comparable companies include LIC Housing Finance (P/E of 7.3), PNB Housing Finance (P/E of 12.4), Can Fin Homes (P/E of 12.9), Aadhar Housing Finance (P/E of 18.7), Aavas Financiers (P/E of 3.3), Aptus Value Housing Finance (P/E of 24.6), and Home First Finance (P/E of 24.3).

During the financial year 2023-2024, the housing lender saw a 38% increase in net profit to Rs 1,731 crore from Rs 1,258 crore in the previous financial year. By March 31, 2024, the percentage of home loans in relation to the company's total assets under management (AUM) fell to 57.8 percent from 61.7 percent in the prior year.

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