Shares of Bajaj Housing Finance, one of India's biggest mortgage providers, shot up by as much as 136 per cent to Rs 165 during its trading debut on India's stock exchanges on Monday, after the $782 mn offering drew bids for more than 67 times the shares offered last week.
Bajaj Housing Finance, part of the nearly century-old Bajaj Group which sells everything from scooters to insurance, has grown with the rapid expansion of India's property market. The mortgage provider registered a 31 per cent annual increase of assets under management to Rs 970 bn ($12 bn) in the quarter to the end of June.
The listing comes after India's central bank ordered a group of large non-bank lenders to go public by 2025 in an effort to enhance regulation of the sector.
Sanjiv Bajaj, chair of Bajaj Finserv, said that, regardless of the Reserve Bank of India's rules, it was a good time to list the company and diversify its funding.
Bajaj said it was also an “open question” whether Bajaj Finance, which has $42 bn in assets under management, would float its four-year-old brokerage business down the line. The billionaire also sought to play down concerns over a rise in bad loans, adding that a deterioration of personal loan credit quality following a boom in retail lending during the pandemic was temporary.
“It will come back within a manageable level and then it'll grow from there, Bajaj said. “We've seen multiple such cycles over the last couple of decades.”
Over the past year, the RBI has warned over the breakneck growth of consumer loans and credit card debt.
“We saw slightly elevated stress levels in unsecured personal loans and we slowed down our growth over there,” Bajaj said. “The important thing is to take note of it, act on it and then go back to it when the times get better.”
Bajaj added that he was untroubled by heightened competition, including from other shadow lenders, such as Jio Financial Services, which was listed last year and is owned by rival Indian billionaire and Asia's wealthiest tycoon Mukesh Ambani.
The Bajaj family's legacy is deeply tied to India's freedom movement, with Jamnalal Bajaj playing a key role. After Mahatma Gandhi returned from South Africa, Bajaj embraced his teachings and became a close ally. He donated 20 acres of land in Wardha, where Gandhi established the Sevagram Ashram, making it a central hub from where Gandhiji started nationwide campaign for Independence.
Jamnalal Bajaj also supported Acharya Vinoba Bhave’s Paunar Ashram and was a strong advocate for Gandhi’s principles like non-violence and the khadi movement. Gandhi was so fond of Bajaj that he considered him an adopted son, and the Bajaj family continues to uphold these values today.
