Missed Bajaj Housing Finance listing day rally? Check these alternate options

Bajaj Housing Finance delivered one of the biggest IPO success stories of 2024, with its shares skyrocketing on listing day.
The stock opened at Rs 150, a 114% premium over its issue price of Rs 70, and continued its rally, hitting the upper circuit with an additional 10% gain. By the end of the trading session, the company’s stock price stood at Rs 164.99, and its market capitalisation had surged to over Rs 1.37 lakh crore.
But for those who missed out on the listing day windfall, what are the next steps?
Many analysts believe that chasing Bajaj Housing Finance’s stock at its current price might not offer much upside potential.
With a price-to-book (P/B) value of 6x—one of the highest in the industry—the stock’s valuation is steep.
Dalal Street veteran Chakri Lokapriya told The Economic Times that housing finance, being a commoditised business, may not warrant buying into the stock at these levels.
“If you were lucky enough to get the IPO, I’d recommend selling. Otherwise, I’d look at other housing finance companies like PNB Housing or LIC Housing,” he said.
For those looking to invest in the housing finance sector, there are still options available such as PNB Housing Finance and LIC Housing Finance, which could be viable alternatives.
These companies are trading at more reasonable P/B ratios of 1x to 2.5x, offering better value compared to Bajaj Housing Finance. Additionally, investors can also consider Home First Finance, which comes with a 25% lower valuation compared to Bajaj Housing.
Moreover, some analysts believe that the Bajaj Housing Finance IPO will bring attention to other private Non-Banking Financial Companies (NBFCs), especially those in the housing finance space.
For those lucky enough to secure shares during the IPO, the question is whether to book profits now or hold for long-term gains.
Market expert Prashanth Tapse from Mehta Equities suggests a balanced approach. “For conservative investors, profit booking makes sense, as the listing gains have surpassed expectations. But long-term investors could hold onto the stock, given the positive outlook for the housing finance sector,” he said.
He added that Bajaj Housing Finance is well-positioned to tap into the growing demand for home loans in India, making it a good option for those with a long-term investment horizon.
Shivani Nyati from Swastika Investmart also advises those holding onto the stock to set a stop loss at Rs 135 as a risk management strategy, ensuring they protect their profits while still having exposure to the company’s future growth.
\(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)