Bajaj Housing Finance IPO

Bajaj Housing Finance Limited, registered with the National Housing Bank on September 24, 2015, began mortgage lending in Fiscal 2018. Within seven years, it became the largest non-deposit-taking HFC in India by AUM and the second-largest HFC overall. It’s also the eighth-largest NBFC-UL in India, notable for its profitability with strong returns on average assets and equity in Fiscal 2024. The company leads its peers with the fastest AUM CAGR growth rate from Fiscal 2022 to 2024.

Bajaj Housing Finance offers a diverse range of financial solutions for both individuals and corporate entities. These solutions include home loans, loans against property (LAP), lease rental discounting, and developer financing. The company primarily focuses on individual retail housing loans, supplemented by various lease rental discounting and developer loans.

As of March 31, 2024, Bajaj Housing Finance’s assets under management (AUM) stood at ₹913,704.0 million, showcasing a compound annual growth rate (CAGR) of 30.9% from Fiscal 2022 to 2024. The average ticket size for its home loans was ₹4.6 million, with an average loan-to-value ratio of 70.5%. Additionally, 75.8% of the company’s home loan AUM came from customers with a CIBIL score above 750.

The company offers the most diversified suite of mortgage lending products in India and has the highest proportion of salaried customers in its home loan portfolio among large HFCs. It is known for focusing on prime housing and has one of the highest average ticket sizes.

Bajaj Housing Finance maintains the lowest gross non-performing assets (GNPA) ratio at 0.27% and net non-performing assets (NNPA) ratio at 0.10% among major HFCs in India. It enjoys the highest possible credit ratings for long-term and short-term borrowing programs.

In Fiscal 2024, Bajaj Housing Finance disbursed loans amounting to ₹446.6 billion, marking it as the second highest in terms of loan disbursement by HFCs in India. The company also ranks second in terms of AUM per branch and per employee among large HFCs.

Part of the renowned Bajaj group, founded in 1926, Bajaj Housing Finance has a strong presence across various sectors. As of March 31, 2024, it served 308,693 active customers, 81.7% of whom were home loan customers. Over the last three fiscals, the company’s loan disbursements show significant growth, underlining its expanding market reach.

Bajaj Housing Finance operates through a network of 215 branches across 174 locations in 20 states and three union territories. This network is supported by six centralised hubs for retail underwriting and seven processing hubs, ensuring efficient service delivery to meet the diverse needs of its customers across urban and upcountry locations.

Bajaj Housing Finance IPO Strengths

• Bajaj Housing Finance holds AUM of ₹913,704.0 million as of 2024.
• Achieved a CAGR of 30.9% from Fiscal 2022 to 2024.
• Maintains lowest GNPA and NNPA ratios among peers in 2024.
• Experienced management team with over 21 years of association with the Bajaj group.
• Extended distribution with 1,784 active channel partners by 2024.
• Disbursed loans amounting to ₹446.6 billion in Fiscal 2024.
• Operates 215 branches across 174 locations in 20 states.

Bajaj Housing Finance IPO Risks

• Inability to recover full collateral value could adversely affect financial stability.
• Exposure to real estate sector fluctuations risks asset value declines.
• Developer financing loans at 10.5% AUM risk due to project delays.
• Regulatory changes could increase provisioning needs, affecting financial health.
• Interest rate volatility could erode Net Interest Margins, currently at 4.1%.
• Periodic NHB inspections risk penalties if non-compliance is found.