Published: 09th Sep 2024
By: Value Research
Bajaj Housing Finance IPO is a result of a regulatory mandate, rather than the company’s need for money. It's backed by financial powerhouses—Bajaj Finance and Bajaj Finserv—so it’s got plenty of buffers.
Bajaj Finance and Bajaj Finserv have created millionaires in the past decade. And investors are now pinning similar hopes on Bajaj Housing Finance to continue this legacy. Can it do so? 5 strengths that suggest yes:
Bajaj Housing Finance’s assets under management (AUM) grew from Rs 3,500 crore in FY18 to Rs 97,071 crore by June 2024—an astonishing 72% annual growth rate. It’s now the second-largest housing finance company after LIC Housing Finance.
Despite rapid growth, the company maintained stellar asset quality, with an average gross NPA of just 0.18% during FY18-24, compared to the industry average of 2%. This shows solid risk management!
Bajaj Housing Finance primarily lends to highly creditworthy borrowers. In fact, 87% of its customers are salaried individuals, reducing the risk of defaults. Plus, it has the highest average loan size in the industry at ₹46 lakh!
Thanks to its parent company, Bajaj Housing Finance has access to a huge existing customer base. Cross-selling opportunities are abundant, giving it a big advantage in the housing finance market.
It’s not just home loans! It has a comprehensive suite of mortgage products including loans against property and those for developer finance. Its peers are no match when it comes to such product variety.
Keep in mind that rapid expansion comes with risks in lending businesses. We have drawn out a more detailed comparison of Bajaj Housing Finance and its key peers in our story. We talk about the risks too, and how it fares on income, valuation and other key financial metrics. Click the link below to read.