Bajaj Housing Finance IPO: The good and the bad

Published: 07th Sep 2024

By: Value Research

About the company

The housing financier has been engaged in mortgage lending since FY18. It provides home loans and loans against property primarily to individual retail borrowers. But its customers range from individual home buyers to large-scale developers. Its average loan ticket size of Rs 46 lakh is the highest in the industry.

Total IPO size (Rs cr) 6560   Offer for sale (Rs cr) 3000   Fresh issue (Rs cr) 3560   Price band (Rs) 66-70   Subscription dates September   9-11, 2024   Purpose of issue To   meet regulatory mandate

IPO details

58297   Net worth (Rs cr) 18280   Promoter holding (%) 88.7   Price/earnings ratio (P/E) 33.3   Price/book ratio (P/B) 3.2M-cap (Rs cr)

Post-IPO

2Y CAGR (%) 12-months ending June 2024 FY24 FY23 FY22   NII (Rs cr) 37.6 2570 2510 2058 1326   PAT (Rs cr) 56.1 1752 1731 1258 710   AUM (Rs cr) 30.9 97071 91370 69228 53322   Borrowings (Rs cr) 29.1 73347 69129 53745 41492   Net worth (Rs cr) 34.7 14720 12234 10503 6741Key financials

Financial history

NII is net interest income AUM is assets under management PAT is profit after tax

Ratios 3Y average (%) 12-months ending June 2024 FY24 FY23 FY22   ROE (%) 13.6 13.6 15.2 14.6 11.1   ROA (%) 2.2 2.3 2.4 2.3 1.8   NIM (%) 4.2 3.4 4.1 4.5 4   GNPA (%) 0.3 0.3 0.3 0.2 0.3

Key ratios

ROE is return on equity ROA is return on assets NIM is net interest margin GNPA is gross non-performing assets

The Good

The housing finance company has clocked enormous AUM growth of 72% per annum during FY18-24, while managing the lowest NPA ratios in the industry.

The Good

Since the company is a subsidiary of financial behemoths Bajaj Finance and Bajaj Finserv, it has access to their large customer base and network, which gives it a competitive and unique edge over its peers.

The bad

Most of its loan book caters to the premium segment. However, a high loan-to-value ratio compared to peers makes it much more vulnerable to credit risks. Check this risk, with its other key metrics like ROA, ROE, NPAs and capital adequacy from the link below.

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