Bajaj Housing Finance IPO: 5 reasons why the parental legacy can continue

When companies are making a beeline to woo investors that are more than eager to be wooed in the IPO rush, Bajaj Housing Finance's public offer comes rather reluctantly. The company, in all likeliness, wouldn't have come out with the IPO, if not for the regulatory mandate that required it to. Why? Simply because, it didn't need to. It has more than enough in its buffers. And as a part of one of India's strongest financial services conglomerates, it carries with it an extraordinary advantage—which is the Bajaj pedigree, more specifically—of its parents Bajaj Finance and Bajaj Finserv. So, here's a company that wasn't really scouting for public market money in the first place, and is backed by two behemoths, who themselves are held in the highest regard on D-Street for the glorious returns they have generated in the past. Bajaj Finance and Bajaj Finserv essentially created many millionaires out of their early investors in the last decade. The past inspires confidence. And similar hopes are getting pinned on their housing finance subsidiary. That Bajaj Housing Finance will continue the legacy. The stock is eyeing a listing pop of 80 per cent in the grey market. Can it, or can it not redo a Bajaj Finance-style success? No one can predict that. But the business is solid and ahead of competitors on many essential parameters. We lay out some of them below: 1) Size/AUM Bajaj Housing Finance began its mortgage lending operations in FY18 with a small AUM of Rs 3,500 crore, which grew at an exponential 72 per cent per annum to Rs 97,071 crore (as of June 30, 2024), making it the second-largest housing finance company (HFC) behind LIC Housing Finance. 2) Asset quality The company has managed to charge ahead with rapid growth while maintaining healthy asset quality against the industry. Between FY18-24, it has reported an average gross non-performing assets (GNPAs) of 0.18 per cent compared to the industry average of 2 per cent. 3) Customers and loan book