Bajaj Housing Finance's ₹7,000 cr IPO to shake up industry valuation

Experts say co looking for valuation of a ₹83,550 cr, which would make it largest in the industry

-  BENN KOCHUVEEDAN

THE Bajaj Group, which is entering the primary capital markets with a bumper offer of ₹7,000 crore after nearly two decades, is set to shake up the industry that has been going through dull moments since the exit of the industry leader HDFC last July from the scene following its reverse merger with its sibling commercial bank, according to analysts.

Bajaja Housing is entering a universe, which is dominated by Indiabulls Housing Finance, LIC Housing Finance, Piramal Capital and Housing Finance, PNB Housing Finance in the pecking order of average AUMS for FY22 and FY23 with over 50,000 crore. Bajaj Housing is already in the upper layer of this.

As per the investment bankers who are not working on the issue, Bajaj Housing Finance is likely looking at a valuation of a $10 billion, which would make it the largest in the cluttered industry. According to an analyst, the Pune-based company whose sister concerns Bajaj Auto and Bajaj Capital lead the industry in terms of price-to-earnings ratios and are the most profitable in these terms. Bajaj Auto, in fact, is the most profitable auto company in the world in terms PE ratios.

The same analysts pegs Bajaj Housing to ask for a price band of whopping 830-844 per share or a market capitalisation of about ₹50,000 crore on listing. Parent Bajaj Finance has a market capitalisation of ₹5 trillion (5 lakh cr), and Bajaj Housing's valuation represents about 10% of that. Even if Bajaj Housing was to exceed expectations by 50% on listing, it will translate into just about a 5% upside to Bajaj Finance's valuation.