Bajaj Housing Finance: Is the 52-Week Low a Buying Opportunity?
Bajaj Housing Finance was one of the most successful listings of 2024, with the three-day IPO receiving strong bids. At one point, the stock was the most bid IPO in the country, with its ₹6,560 crore issue getting bids worth over ₹3.2 lakh crore. However, the stock has faced a significant downturn, and shares of Bajaj Housing Finance Ltd. were on a four-day losing streak going into Thursday's trading session.
The stock fell to a 52-week low of ₹95, after its promoter Bajaj Finance sold stake in the company. With this, shares of Bajaj Housing Finance have halved from their post-listing high of ₹188.5, to which the stock had surged to within a few days of listing. It is now closer to its IPO price of ₹70 per share.
Bajaj Finance confirmed the sale of stake worth ₹1,600 crore. Promoters will still have over 85% stake in the company, which leaves an overhang of further supply coming in to be compliant with Minimum Shareholding Norms.
With such a steep correction, has the stock made a bottom? Here's what a fundamental and technical expert told CNBC-TV18:
"What is clear from the charts, with the limited data, is that it doesn't seem like it has bottomed. It's probably got at least a sequence of lower lows and lower highs to come through, and the momentum is strongly with the downward price action. So, I wouldn't venture to get into bottom fishing on the stock," Jai Bala of cashthechaos.com told CNBC-TV18.
Sudip Bandhopadhyay of Inditrade Capital also chose to remain in wait-and-watch mode.
"I think still it's about four-time book. And a housing finance company at four-time book is - you have to be very careful. You have to also consider the fact that the promoters will have to further sell shares to pare down the stake to the 75% level. So, it's better to wait and watch. If the promoters are able to do deals with funds in a manner that it doesn't affect the market price, well and good, but it's a matter of future, we don't know what's going to happen. In any case, the valuation still is kind of rich," he said.
Bajaj Housing Finance was among the most successful listings of 2024, with the three-day IPO receiving strong bids. At one point, the stock was the most bid IPO in the country, with its ₹6,560 crore issue getting bids worth over ₹3.2 lakh crore. That was later surpassed by LG Electronics India, which received bids for over ₹4 lakh crore.
Shares of Bajaj Housing Finance have recovered from the lows of the day, currently trading little changed at ₹97.06.
