Bajaj Housing Finance IPO GMP jumps from ₹42 to ₹56 ahead of RHP filing: Market observers

Bajaj Housing Finance IPO: The initial public offering (IPO) of non-banking financial company (NBFC) Bajaj Housing Finance will hit D-Street soon. Market observers expect the red herring prospectus (RHP) soon, with details of the public issue. However, before the RHP filing, market observers said that Bajaj Housing Finance IPO grey market premium (GMP) rose from ₹42 to ₹56 on Saturday, August 31.

'Grey market premium' indicates investors' readiness to pay more than the issue price. The subscription window is expected to open in the first or second week of September. Investors eagerly anticipate details about the price band and bidding dates for what is considered one of the most highly anticipated IPOs.

Also Read: Bajaj Housing Finance IPO: Why you should buy Bajaj Finance, Bajaj Finserv shares this week?

Bajaj Housing Finance IPO Details:

The issuance of new shares in the public offering will amount to ₹4,000 crore. According to the draft red herring prospectus (DRHP), Bajaj Finance Ltd, the parent company, plans to sell additional shares worth ₹3,000 crore through an offer for sale. 

The company aims to use the proceeds from the new shares to strengthen its capital base for future lending activities. Moreover, listing its shares on stock exchanges will give the company advantages such as increased brand visibility and establishing a public market for its shares in India. Some funds from the new shares will be allocated to cover offer-related expenses.

The public offering comprises equity shares for eligible employees to subscribe to and set-aside shares with a face value of ₹10 each for eligible promoters, including individuals and HUFs who are part of the promoters' public equity ownership.

Also Read: Upcoming IPO: Bajaj Housing Finance IPO to hit D-Street early September

The NBFC, in its draft papers, explained the eligible shareholders who can apply for the Bajaj Housing Finance IPO under the shareholder's category, saying, "Individuals and HUFs who are public equity shareholders of our promoters, excluding such other persons not eligible to invest in the offer under applicable laws, rules, regulations and guidelines and any depository receipt holder of our promoters.''

So, those who hold the parent company stocks (either or both) at the time of the NBFC's RHP filing (i.e., by Saturday, August 31) will be eligible to apply for the Bajaj Housing Finance IPO under the shareholder's category.