Bajaj Housing Finance Shares Plummet as Lock-In Period Ends
Bajaj Housing Finance shares took a hit on Monday, October 15, as its one-month lock-in period concluded. The stock dropped by 4%, falling below its listing price of ₹150.
Bajaj Housing FinanceStock MarketIpoLockin PeriodShare PriceReal Estate NewsOct 14, 2024
The company made its debut on the stock market on September 16, with an IPO price of ₹70 per share. The initial listing saw a significant surge, with the stock price jumping by 135% on its first day, reaching ₹188. However, the momentum did not last, and the stock has been on a downward trend since then.
According to a note from Nuvama Alternative & Quantitative Research, 12.6 crore shares, or 2% of the company's outstanding equity, will now be eligible for trading. It is important to note that the conclusion of the lock-in period does not mean that all these shares will be sold immediately. Instead, they will become available for trading in the open market.
The stock's performance has been under scrutiny, with brokerage firm HSBC initiating coverage on Bajaj Housing Finance with a 'reduce' rating and a price target of ₹110. This implies a potential downside of 26% from the current levels. HSBC's analysis suggests that the current valuations of Bajaj Housing Finance, at 5.5 times the financial year 2026 price-to-book and 44 times the financial year 2026 price-to-earnings, indicate high expectations for growth in Assets Under Management (AUM) and earnings.
The next significant event for Bajaj Housing Finance will be the end of the three-month lock-in period, scheduled for December 12. At that point, another 12.6 crore shares, or 2% of the outstanding equity, will become eligible for trading. This could further impact the stock's performance, depending on investor sentiment and market conditions.
For now, investors are advised to monitor the stock's movement closely, as the eligibility of additional shares for trading could introduce more volatility in the market. The recent drop in share price and the reduced rating from HSBC add to the uncertainty surrounding Bajaj Housing Finance's future performance.
Frequently Asked Questions
When did Bajaj Housing Finance make its stock market debut?
Bajaj Housing Finance made its stock market debut on September 16, with an IPO price of ₹70 per share.
What was the initial performance of Bajaj Housing Finance's stock on its listing day?
The stock saw a 135% increase on its listing day, reaching ₹188.
What is the impact of the lock-in period ending on Bajaj Housing Finance's shares?
12.6 crore shares, or 2% of the company's outstanding equity, become eligible for trading, which could introduce more volatility in the market.
What is HSBC's rating and price target for Bajaj Housing Finance?
HSBC initiated coverage with a 'reduce' rating and a price target of ₹110, implying a potential downside of 26%.
When is the next significant lock-in period event for Bajaj Housing Finance?
The three-month lock-in period will end on December 12, making another 12.6 crore shares eligible for trading.
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