16 september 2024 : Bajaj Housing Finance Ltd.’s shares soared over 136% on their trading debut, marking the most successful first-day performance for IPOs raising over $500 million. The home-loan unit of India’s largest shadow lender saw its stock rise to 165 rupees, up from the offer price of 70 rupees. This debut follows India’s largest IPO of the year, which raised 65.6 billion rupees ($781 million) and attracted bids totaling more than $39 billion.
Pranav Bhavsar of Trudence Capital Advisors Pvt. attributed the surge to domestic investors seeking IPOs for better valuation opportunities amid an overheated market. The high demand from local retail and institutional investors has led to $8.6 billion raised through new listings in India this year, surpassing the previous two years’ totals.
Bajaj Housing’s successful debut benefits from the strong brand reputation of its parent company, Bajaj Finance, known for its robust returns and diverse financial services. The company’s history of impressive performance, with shares returning about 40% annually over the past decade, has bolstered investor confidence.
The IPO’s success reflects broader trends in India’s market, with other major listings like Ola Electric Mobility Ltd. and Brainbees Solutions Ltd. also experiencing significant first-day gains. Upcoming major IPOs include Hyundai Motor Co.’s Indian unit and LG Electronics Inc.’s potential Indian business listing. Swiggy Ltd., the food delivery platform, is also reportedly planning an IPO to raise over $1 billion.
The Bajaj Housing IPO, managed by top financial institutions including Kotak Mahindra Capital Co., Bank of America, and others, involved the sale of new shares worth up to 35.6 billion rupees and shares offered by Bajaj Finance worth 30 billion rupees.