Housing finance stocks soar upto 15% ahead of Bajaj Housing Finance listing
Source: Business Standard
Bajaj Housing Finance IPO: Shares of housing finance companies (HFCs) were in demand on Friday, surging up to 15 per cent on the BSE in the intraday trade amid heavy volumes. The buying interest came across the sector ahead of Bajaj Housing Finance’s stock market listing next week.
PNB Housing Finance (8 per cent at Rs 1,201.45), Can Fin Homes (5 per cent at Rs 951.45), LIC Housing Finance (4 per cent at Rs 730.55), and Aavas Financiers (4 per cent at Rs 1,878.70), meanwhile, were up in the range of 4 per cent to 8 per cent. In comparison, the BSE Sensex was down 0.04 per cent at 82,929 at 11:25 AM.
Bajaj Housing’s IPO saw a robust demand across investor segments, with the overall demand exceeding 67 times the shares on offer. The institutional investor portion of the issue was subscribed a staggering 222 times, while high net worth individual portions (of up to Rs 10 lakh and more than Rs 10 lakh) saw subscription of 51 times and 31 times, respectively. Bids from individual investors exceeded Rs 60,000 crore.
Further, growing urbanisation and government initiatives such as Pradhan Mantri Awas Yojana (PMAY) aims to make AHFCs easily accessible for middle to lower income segments. The long-term outlook for AHFCs remains positive, supported by a large underserved market, favourable demographics, housing shortage, and government incentives like tax benefits and subsidies.
The Government’s commitment to inclusive growth is demonstrated by the expansion of the PMAY scheme, which includes the provision of 3 crore additional houses in urban and rural areas. This is a substantial stride toward the realization of the government’s vision of “Housing for all”, according to analysts.
As per CRISIL Market Intelligence & Analytics (MI&A) estimates, net interest margins for HFCs stood at 3.2 per cent in fiscal 2024, which is expected to reach 3.3 per cent in fiscal 2025 due to expectation of decline in repo rates in the first quarter of fiscal 2025. During fiscal 2024 and fiscal 2025, GNPA (90+ DPD) for HFCs is expected to witness a slight decline to 1.3 per cent in fiscal 2025. Further, credit costs are expected to decline 20 bps in fiscal 2025 on account of higher write-offs in the first half of fiscal 2024 translating into an improvement in return on assets in fiscal 2025 at 2.0 per cent.
First Published: Sep 13 2024 | 12:30 PM IST
