Bajaj Housing Finance Shares Hit 10% Upper Circuit for Second Consecutive Day

Shares of Bajaj Housing Finance hit their second consecutive 10% upper circuit on Tuesday, following a significant 135% surge from its IPO price on its listing day.

Currently, the stock is trading 9% higher at ₹179.8, marking a nearly 160% increase from its IPO price in just two days of trading as a public company.

Bajaj Housing Finance now ranks as the fourth-best IPO listing of 2024, trailing behind BLS E-Services, Premier Energies, and Unicommerce e-solutions. The stock debuted with a 114% premium to its IPO price of ₹70, closing the first day at ₹165, representing a 135% gain.

On the day of its listing, the Bajaj Housing Finance stock received its first "buy" recommendation from PhillipCapital, which initiated coverage with a price target of ₹210, indicating a potential 3x return from its IPO price and a further 27% upside from Monday’s close.

Dipan Mehta of Elixir Equities believes Bajaj Housing Finance will consistently trade at a premium, given its status as the largest standalone housing finance company to go public. He suggests that investors interested in exposure to this segment of the NBFC sector are likely to drive the stock’s continued outperformance and premium valuations.

Mehta also noted the confidence expressed by management in future growth. He pointed out that housing finance companies (HFCs) tend to have the lowest risk in terms of non-performing assets (NPAs) due to their secured lending practices, making them a safer bet within the broader NBFC space. As the largest and fastest-growing company in this segment, Bajaj Housing Finance is expected to draw significant investor attention.

The IPO of Bajaj Housing Finance, which attracted record bids totaling over ₹3.24 lakh crore, saw the stock listed at a substantial 114% premium. On both the NSE and BSE, the stock opened at ₹150 per share, delivering substantial returns to early investors. It later peaked at ₹165, further extending gains for those who received share allotments. Following this strong debut, several market experts suggested that the stock has more upside potential, advising investors to hold for the long term.

Arun Kejriwal, Founder of Kejriwal Research and Investment Services, recommended that shareholders maintain a stop loss just below the stock's weighted average, which currently sits at ₹155. He emphasized that if the stock remains above this level, further gains are possible.

Astha Jain, Senior Research Analyst at HEM Securities, described Bajaj Housing Finance as a key portfolio stock in the NBFC sector. She advised long-term investors to book 50% profits while retaining their principal investment for future growth, allowing for potential reinvestment if the stock dips.

Discussing the potential for Bajaj Housing Finance to become the next IREDA post-listing, Arun Kejriwal highlighted that much will depend on the stock’s performance in the coming sessions. If it continues to trade above ₹155, fresh buying could be triggered, positioning the stock as a contender for further debate around its long-term potential. However, should the stock drop below ₹155, it could face significant selling pressure, similar to what was seen with Tata Technologies.

Bajaj Housing Finance, now a key stock in the Bajaj Group Stocks has set a new record as the most subscribed in Indian history, with bids exceeding ₹3.24 lakh crore. This unprecedented demand is a reflection of the trust in the Bajaj brand, which boasts a nearly 100-year legacy. The overwhelming response to its ₹6,560 crore IPO surpasses even the Coal India IPO of 2008, which garnered ₹2.36 lakh crore in bids. Prior to this, Premier Energies had also attracted notable attention in 2024, with bids nearing ₹1.5 lakh crore.