• Bajaj Housing Finance's $782 million IPO was fully subscribed on its first day, marking a bustling week for Indian IPOs.
• The company's IPO is set to make it India's most valuable listed home loan provider with a valuation of around $7 billion.
• The high demand for shares reflects strong investor interest in the company and the broader home loan market in India.

The Indian stock market has been witnessing a record-breaking spree this year, with Bajaj Housing Finance's $782 million initial public offering (IPO) fully subscribed on the first day of bidding. This marked the onset of a bustling week for Indian IPOs, with 16 companies, including Bajaj Housing Finance's smaller peer Sammaan Capital, opening for subscription.

The market has hit new highs over 50 times this year, with about 200 companies raising more than $7 billion through IPOs, including high-profile offerings from electric vehicle maker Ola Electric Mobility and telecom operator Bharti Hexacom.

Pranav Haldea, managing director of capital market information provider Prime Database Group, attributed the active IPO market to a bullish secondary market and an extended rally. He noted that the sentiment is positive due to a strong Indian economy and a significant influx of liquidity from domestic institutional and individual investors.

The Nifty 50 index, a benchmark for the Indian stock market, has gained about 15% in 2024. Domestic institutional investors have injected nearly $38 billion, offsetting selling by foreign investors.

Bajaj Housing Finance's IPO: A Game Changer

Bajaj Housing Finance's IPO, one of India's largest offerings this year, is set to make the firm the country's most valuable listed home loan provider at a valuation of around $7 billion. The shares were offered in a 66-70 rupee band, and the IPO was scheduled to close on Wednesday.

The company, a unit of non-bank lender Bajaj Finance, has already raised about $209 million from major institutional investors, including the government of Singapore, BlackRock, and Abu Dhabi Investment Authority.

Non-institutional investors bid for more than twice the shares reserved for them, while retail investors bid for about 99% of the shares earmarked for them. This high demand reflects the strong investor interest in the company and the broader home loan market in India.

Bajaj Housing Finance stands to benefit from India's rising home prices, driven by demand for luxury properties, which forms a major part of its business.

The Broader Impact on the Indian Stock Market

The success of Bajaj Housing Finance's IPO is part of a broader trend in the Indian stock market. Other companies, such as FirstCry and Tata Motors, have also made significant strides in their respective sectors. FirstCry is seeking to raise up to $501 million in an IPO, valuing the company as much as $2.9 billion. Tata Motors, on the other hand, is racing towards record electric car and SUV sales in FY2024.

Kranthi Bathini, an equity strategist at WealthMills Securities, noted that the company's strong pedigree would attract investor interest. Arun Kejriwal, founder of Kejriwal Research, pointed out that amid high demand for home loans, more builders are entering the luxury segment rather than affordable because there is more money in that business. This trend aligns with Bajaj Housing Finance's focus on the luxury home loan market.