Bajaj Housing Finance Limited Company Business Profile
Bajaj Housing Finance is an upper layer non-deposit taking housing finance entity registered with the National Housing Bank since September 24, 2015. The company offers financial solutions for individuals and corporate entities for the purchase and renovation of homes and commercial spaces. The company offers wide range of financial solutions for home purchases, renovations, and commercial space financing. Bajaj Housing Finance operates through a network of 215 branches across 174 locations in 20 states and three union territories, overseen by six centralized hubs for retail underwriting and seven centralized processing hubs for loan processing.
Bajaj Housing Finance Limited IPO Details:
| IPO Open Date | September 9, 2024 |
| IPO Close Date | September 11, 2024 |
| Basis of Allotment | September 12, 2024 |
| Listing Date | September 16, 2024 |
| Face Value | ₹10 per share |
| Price | ₹66 to ₹70 per share |
| Lot Size | 214 Shares |
| Total Issue Size | 937,142,858 shares |
| Aggregating up to ₹6,560.00 Cr | |
| Fresh Issue | 508,571,429 shares |
| Aggregating up to ₹3,560.00 Cr | |
| Offer For Sale | 428,571,429 shares of ₹10 |
| Aggregating up to ₹3,000.00 Cr | |
| Issue Type | Book Built Issue IPO |
| Listing At | BSE & NSE |
| QIB Shares Offered | Not more than 50% of the Net Issue |
| Retail Shares Offered | Not less than 35% of the Net Issue |
| NII (HNI) Shares Offered | Not less than 15% of the Net Issue |
Bajaj Housing Finance Limited IPO Share Price
The issue price of Bajaj Housing Finance has been released for Rs. 66 to Rs. 70. The investors can bid between these price ranges. As per the DRHP, Bajaj Housing Finance IPO has fresh issue of up to Rs 3560 crores and an offer-for-sale (OFS) of Rs. 3000 crores.
Bajaj Housing Finance IPO Size & Launch Date
Bajaj Housing Finance IPO will open for subscription from September 9, 2024 till September 11, 2024. The stock will be listed on September 16, 2024.
Bajaj Housing Finance Limited IPO Objective
The Bajaj Housing IPO offer comprises of a fresh Issue and an offer for sale
- All the money raised through offer for sale will go to selling shareholder / selling promoter and nothing from that will be entitled to the company. The offer for sale comprises of Rs. 3000 crores.
- Out of the Rs. 3560 crores raised through fresh issue, 100% of the amount will be used towards augmenting the capital base to the company to meet future business requirements towards onward lending
Bajaj Housing Finance Limited Financial Statement:
| Particulars | FY24 | FY23 | FY22 |
| Revenue from Operations | |||
| Interest income | 72023.6 | 52692.4 | 34817.5 |
| Fees and commission income | 1382.3 | 862.2 | 818.5 |
| Net gain on fair value changes | 1332 | 1120.4 | 589.7 |
| Sale of services | 524.8 | 502.9 | 1420.2 |
| Income on derecognised (assigned) loans | 530.8 | 1340 | - |
| Other operating income | 379.6 | 121.4 | 21.2 |
| Total revenue from operations | 76173.1 | 56647.3 | 37667.1 |
| Other income | 4 | 7.1 | 4.2 |
| Total income | 76177.1 | 56654.4 | 37671.3 |
| Expenses | |||
| Finance costs | 46926.1 | 32113.2 | 21553.1 |
| Fees and commission expense | 117.1 | 140.3 | 46.8 |
| Impairment on financial instruments | 608.8 | 1235 | 1810.7 |
| Employee benefits expense | 4656.3 | 4351.4 | 3489.4 |
| Depreciation and amortisation | 396 | 334 | 257.6 |
| Other expenses | 1859.6 | 1479.9 | 915.1 |
| Total expenses | 54563.9 | 39653.8 | 28072.7 |
| Profit after tax | 17312.2 | 12578 | 7096.2 |
| Particulars | FY24 | FY23 | FY22 |
| Footprint / Presence | |||
| No. of States/UTs | 23 | 20 | 17 |
| No. of Branches | 215 | 208 | 201 |
| No. of Locations | 174 | 162 | 157 |
| No. of Employees | 2372 | 2788 | 3705 |
| Portfolio Cuts | |||
| AUM | 913704 | 692279 | 533217.2 |
| AUM y-o-y Growth | 32% | 29.80% | 37.20% |
| Disbursement | 446562.4 | 343336.3 | 261752.4 |
| Disbursement y-o-y Growth | 30.10% | 31.20% | 73.50% |
| Product-wise AUM | |||
| HL | 57.80% | 31.70% | 64.80% |
| LAP | 10.50% | 11.30% | 13.90% |
| LRD | 19.30% | 16.30% | 12.90% |
| DF | 10.50% | 8.20% | 5.40% |
| Others | 1.90% | 2.50% | 3.00% |
| AUM Mix | |||
| On-book | 86.80% | 89.70% | 87.20% |
| Off-book | 13.20% | 10.30% | 12.80% |
| Home Loan AUM Mix (by customer type) | |||
| Salaried | 87.50% | 90.50% | 90.00% |
| Self-employed professional | 4.30% | 5.20% | 5.10% |
| Self-employed non professional | 8.20% | 4.30% | 4.90% |
| Home loan AUM Mix (by Sourcing Channel) | |||
| Direct | 55.70% | 50.20% | 45.40% |
| Indirect | 44.30% | 49.80% | 54.60% |
| Productivity Metrics | |||
| AUM/Branch | 4249.8 | 3328.3 | 2652.8 |
| AUM/Employee | 385.2 | 248.3 | 143.9 |
| Financial Metrics | |||
| Net Worth | 122335 | 105031.9 | 67413.6 |
| Total Income | 76177.1 | 56654.4 | 37671.3 |
| Net Total Income | 29251 | 24541.2 | 16118.2 |
| Profit After Tax | 17312.2 | 12578 | 7096.2 |
| PAT y-o-y Growth | 37.60% | 77.20% | 56.60% |
| Yield on Advances (%) | 10.20% | 9.70% | 8.70% |
| Cost of Borrowings (%) | 7.60% | 6.70% | 5.90% |
| Spread (%) | 2.60% | 3.00% | 2.80% |
| NIM / NTI % | 4.10% | 4.50% | 4.00% |
| Opex to Avg. AR (%) | 1.00% | 1.20% | 1.20% |
| Opex to Net Total Income (%) | 24.00% | 25.70% | 29.20% |
| Credit Cost (%) | 0.10% | 0.20% | 0.50% |
| RoAA (%) | 2.40% | 2.30% | 1.80% |
| RoAE (%) | 15.20% | 14.60% | 11.10% |
| CRAR (%) | 21.28% | 22.97% | 19.71% |
| CRAR (%) - Tier 1 | 21.67% | 22.19% | 18.95% |
| Debt to Equity the ratio | 5.7 | 5.1 | 6.2 |
| Earnings per Share | |||
| Baisc | 2.6 | 1.9 | 1.5 |
| Diluted | 2.6 | 1.9 | 1.5 |
| Asset Quality Metrics | |||
| GNPA % | |||
| HL | 0.27% | 0.21% | 0.29% |
| LAP | 0.68% | 0.70% | 0.80% |
| LRD | 0 | 0 | 0 |
| DF | 0.15% | 0.00% | 0.04% |
| Others | 0.91% | 0.50% | 0.41% |
| NNPA % | |||
| HL | 0.10% | 0.07% | 0.13% |
| LAP | 0.26% | 0.31% | 0.41% |
| LRD | 0.00% | 0.00% | 0.00% |
| DF | 0.04% | 0.00% | 0.00% |
| Others | 0.21% | 15.00% | 13.00% |
| Provision Coverage the ratio (%) | |||
| HL | 61.70% | 64.90% | 55.60% |
| LAP | 62.20% | 60.00% | 49.30% |
| LRD | 0.00% | 0.00% | 0.00% |
| DF | 73.80% | 66.00% | 100.00% |
| Others | 76.70% | 70.30% | 67.90% |
Bajaj Housing Finance Limited Promoters & Shareholders:
There are two promoter of Bajaj Housing Finance Limited:
- Bajaj Finance Limited (“BFL”)
- Bajaj Finserv Limited (“BFS”)
As on the date filing DRHP, Bajaj Finance Limited holds 100% of the paid-up pre-Offer Equity Share capital of the company.
Why Invest in Bajaj Housing Finance Limited IPO or Not?
With the backing of the Bajaj Group, Bajaj Housing Finance Limited stands out as a compelling choice for investors. As the living standards and income level of citizens elevates, the housing finance sector will continues to flourish. Government focus on increased urbanization, rising incomes, and government initiatives like PMAY, BHFL is well-positioned to benefit and deliver value to its stakeholders.
Competitive strength
- Distinguished brand value
The Bajaj group, founded in 1926, is a prominent Indian conglomerate has evolved into a recognized retail brand, contributing to the recognition and growth of the business.
- Strategic presence
The company operates in mortgage-centric markets with a distribution network of 215 branches, six centralized hubs for retail underwriting and seven centralized processing hubs for loan processing, and 1,784 active channel partners. It uses an omni-channel sourcing strategy, including physical presence and digital onboarding functionality, to cater to customer preferences and streamline loan application processes. The company also follows a two-pronged sourcing strategy, focusing on direct channel and intermediaries sourcing verticals for home loans and lease rental allowance. The strategy can be categorized into micro-market focus for home loans, D2C strategy, and expanding intermediary distribution network.
- Borrowing sources
The company is able to borrow at competitive rates due to top credit ratings and also by leveraging its brand value, which confirm its financial health.
- Future Roadmap
Bajaj plans to utilize the fresh issue to fuel expansion plans, strengthen its market presence, and strengthen its tech infrastructure while diversifying its products category.
Risk factors
- Default risk
Salaried customers contribute 87% of total portfolio in the home loan portfolio, followed by self-employed professional customers (4.3%), and self-employed non-professional customers (8.2%). Salary customers may be affected by factors such as lack of liquidity, industry recession, loss of employment or personal emergencies, death or permanent incapacitation, and insufficient coverage of credit-linked insurance for life, property, or in cases of permanent incapacity.
- Impacted of higher interest rates
Banks and NBFC are in business of borrowing at lower interest rate and channeling them into higher yielding domains to make profit. In today’s time interest rates are highly sensitive and can be influenced by various factors including inflation which in turn influences RBI monetary policies, geopolitical and domestic political conditions, and macro-economic environment. The company's operations are heavily reliant on its net interest income apart from the fees charged from processing. As can be seen from financial statement, companies spread has been coming down from 2.8% in 2022 to 2.6% in 2024.
- Exposure to real estate
The primary business and security of Bajaj housing is the underlying property as collateral. Any decline in real estate market conditions or overall economic situation could have significant impact on their business, financial conditions and cash flows. Significant land reforms by the government of India can also have adverse affect on price of real estate.
- Regulatory effects on provisioning of assets
Regulatory body like RBI and NHB are very active when it comes to protecting the consumers and financial resilience. In the time of vulnerability in markets regulatory body can direct NBFC to shore up their reserve ratio on specific segments of loans, impacting their financials and operations.
- Competitive environment
Housing financing industry is highly competitive in India, with competitors like NBFCs, commercial banks, etc. Many of the competitor have advantage like of Bajaj finance like brand value, lower credit borrowing, networking, etc. Any penalty on company or unfair competition could affect business operation, cash flows, and financial condition. Some of the competitors include LIC Housing Finance Limited, Tata Capital Housing, etc.
How to Apply for Bajaj Housing Finance Limited IPO?
The Bajaj Housing Finance IPO GMP is not yet known as the IPO price is not disclosed. Once the IPO is open, the price will be disclosed and as per the demand and supply of the share price in the open market, the Bajaj Housing Finance IPO GMP will be known. If the IPO price is undervalued, less GMP and as per the valuation of the stock overvalued there is less chance for higher GMP.
How to Apply for Bajaj Housing Finance Limited IPO?
If you have a share trading and demat account at Moneysukh, you can easily apply for the Bajaj Housing Finance Limited IPO. Just follow the steps given below.
Step 1: Once Bajaj Housing Finance Limited IPO opens you can apply online.
Step 2: Browse at trade.moneysukh.com and log in with your Moneysukh User ID & password.
Step 3: Now you have to visit the IPO section and select Bajaj Housing Finance Limited IPO.
Step 4: Here just fill in the required such as bidding price, quantity or lot and so on.
Step 5: Now you have to make the payment and your IPO application is successful.
How to Check Bajaj Housing Finance Limited IPO Allotment Status?
Just like applying, checking the Bajaj Housing Finance Limited IPO Allotment Status is also very easy and hassle-free through Moneysukh online platform. You have to just wait till the IPO is closed and the allotment is finalized. If you have been allotted any share it will be transferred into your demat account that you can sell after listing of the shares on the NSE or BSE stock exchanges.
Also Read: How to Increase the Chances of IPO Allotment
However, if IPO is oversubscribed and unfortunately if you have not been allotted any share, your IPO application money will be returned to your bank account or linked account where you have allocated the fund while applying for the Bajaj Housing Finance IPO.
Also Read: How to check IPO allotment status on NSE, BSE through Moneysukh
