Is Bajaj Housing Finance IPO a gateway to India's growing housing market?

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₹66-70 apiece, and the company is looking to raise a total of ₹6,560 crore from its primary stake sale, which includes a fresh share sale of ₹3,560 crore. To understand BHFL's market positioning and assess its prospects, we present a SWOT analysis.

Bajaj Housing Finance distinguishes itself from competitors with a diversified mortgage lending product suite. Unlike many peers who predominantly focus on home loans, BHFL offers a broader range of products, including home loan (57.8% share in FY24), loan against property (10.5%), lease rental discounting (19.3%), developer finance (10.5%), and others (1.9%).

This diversified portfolio enables the company to cater to a wider array of customer needs and mitigates risk by spreading exposure across different product segments. In comparison, competitors like LIC Housing Finance, PNB Housing Finance, Can Fin Homes, Aadhar Housing Finance, Aavas Financiers, Home First Finance, and Aptus Value Housing Finance have a higher concentration in home loans, ranging from 69% to 86%.

In terms of asset quality, BHFL has excelled with a low gross non-performing assets (GNPA) ratio of 0.28% as of June 2024, demonstrating effective risk management strategies. This ratio is significantly lower than those of its peers, such as LIC Housing Finance (3.29%) and other peer companies with GNPAs ranging from 0.91% to 1.70%.

Moreover, it has a strong focus on salaried individuals, known for their financial stability and lower risk profile, with 86.7% of its home loan portfolio consisting of loans to salaried individuals as of June 30, 2024. “Fastestturnaround time due to enhanced digital adoption in loan processing, as well as a high level of digitization incorporated to enhance simplicity and