Macquarie: A strong listing of Bajaj Housing Finance (with a 50 per cent premium) could lead to a 5 per cent upside for the company

According to Macquarie analysts, Bajaj Housing Finance‘s robust debut (at a 50% premium) would propel a 5% gain for Bajaj Finance, the company’s parent. They also opine that other house financing businesses may be rerated as a result of this.

Based on the sum-of-the-parts value, the gray market premium now suggests a price of around Rs 56, or a 50% listing premium. Bajaj Finance may benefit by an extra 5% as a consequence of this from its existing position, they said.

For Bajaj Finance, the brokerage has retained a ‘underperform’ rating despite this possible gain. The target price of Rs 6,300 per share is below the current market price, suggesting a potential loss of 14%. Expectations of a drop in return on equity (RoE) as a result of share dilution in Bajaj Housing Finance, which is scheduled to launch its IPO on September 9, are the driving force for this lower goal.

“We expect RoE to decrease from the current 15 percent to 12 percent as a result of the fresh capital raised through the IPO,” the company said.

Analysts also questioned if Bajaj Housing Finance will ever reach the same prominence as the previous HDFC Ltd. It is expected that Bajaj Housing Finance’s post-IPO valuation would be 2.6 times its estimated book value for the fiscal year 2026.

With its initial public offering (IPO) scheduled for September 9, Bajaj Housing Finance has set a price range of Rs 66–70 per share. The issue consists of a new issuance by Bajaj Finance for up to Rs 3,560 crore and an offer by the company for the sale of up to Rs 3,000 crore. The firm’s entire market capitalization at the higher price range is projected to be at Rs 58,300 crore.

On September 6, the anchor bidding will open, and the issue will close on September 11. Bajaj Housing Finance’s action is in line with the RBI’s mandate that “upper layer” NBFCs list by September 2025, three years after being notified.

The Pune-based Bajaj Housing Finance is a diversified non-banking financial company (NBFC) that offers finance to people and corporations for the acquisition and refurbishment of residential and commercial properties. It has over 76.5 million clients nationally.