Global brokerage HSBC initiated coverage on Bajaj Housing Finance which debuted on the bourses in September.

What Happened: HSBC has a “reduce” call on the stock with a target price of ₹110, reflecting a downside of 27% from its current market price.

Bajaj Housing Finance’s assets under management (AUM) grew by 26% to around ₹1,02,550 crore as of 30 September as compared to ₹81,215 crore as of 30 September 2023, the company said in a statement on Thursday. AUM in Q2 FY25 grew by around ₹5,480 crore, it added.

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The brokerage noted that Bajaj Housing Finance’s return on assets (RoA) is currently at its highest point and projected that its earnings per share (EPS) growth would decelerate due to a slowdown in AUM, pressure on net interest margins and normalised credit costs.

In September, Philip Capital initiated coverage on the stock following its initial public offering with a target price of ₹210 per share. PhillipCapital highlighted Bajaj Housing Finance’s strong positioning in the home loan sector, particularly in the ₹50 lakh ticket size range, which accounts for 65% of home loan originations in India. This focus positions the company as a key player in the segment, it said.

The IPO had garnered an overwhelming response from investors and was listed at ₹150 on both BSE and NSE, representing a premium of 114% over its issue price of ₹70.

Price Action: Shares of Bajaj Housing Finance was trading flat at ₹150.85 on Friday afternoon.

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