Bajaj Housing Finance shares jump 10% a day after bumper listing

Bajaj Housing Finance shares: After making an impressive launch on Monday, Bajaj Housing Finance shares jumped 10% in early trading on Tuesday, reaching the upper circuit at Rs 181.5. A day following the stock’s explosive launch, which more than quadrupled the money of IPO investors, it saw another spike in price.

With a “buy” recommendation, PhillipCapital has started covering the recently listed Bajaj Housing Finance. With a target price of Rs 210, the brokerage projects a 27% increase from Monday’s closing price of Rs 165 a share.

We would view Bajaj Housing Finance favorably due to its sharp attention to salaried house loans, consistent expense ratio, low credit charges, and impressive return ratios. The study said, “We value Bajaj Housing Finance at 6.5x Sep-26 BV.”

Because over 40% of Bajaj Housing Finance’s home loans come from the clients of its parent business, Bajaj Finance, analysts at PhillipCapital think the firm has a greater return ratio than its competitors. Furthermore, around 90% of Bajaj Housing’s house loans are granted to salaried clients, which lowers expenses and raises the company’s risk-adjusted spreads over the medium run.

PhillipCapital reports that Bajaj Housing Finance, on the other hand, distinguishes itself from its competitors by providing top-up home loans in addition to the first home loan, increasing its return in this fiercely competitive sector.

With each branch, Bajaj Housing Finance is increasing its Assets Under Management (AUM) and gaining ground on rival LIC Housing Finance. Its AUM per employee is comparable to Can Fin Homes in the meantime.

The survey said that “Bajaj Housing has better borrowing costs than Can Fin Homes, and its risk-adjusted spreads are lower, as reflected in Return on Equity (RoE).”.

Furthermore, analysts at PhillipCapital believe that Bajaj Housing is in a class by itself since it offers a ticket size of Rs 0.5 crore to a large number of house loan applicants, accounting for around 65% of home loan originations in India.

Bajaj Housing’s balance sheet is estimated to be worth around Rs 2 trillion in three years.

The business is putting more of an emphasis on lease rental discounting (LRD), a high-yield market that offers scale and operational leverage. According to the research, the construction finance (CF) book will account for 8–10% of the overall book.

With its emphasis on creating a low-risk balance sheet with a return on asset (RoA) and return on equity (RoE) of more than 2% and 12%, respectively, in FY25–27, the company’s near-term credit costs are anticipated to be benign.

Furthermore, PhillipCapital is optimistic that Bajaj Housing may raise its expenditure ratios and, therefore, increase return ratios as it grows in size.