A day after Bajaj Housing Finance's impressive market debut, which more than doubled IPO investors' money, brokerage firm PhillipCapital has given the stock a “buy” rating, seeing further potential upside. The company’s shares were also on the climb.

What Happened: PhillipCapital initiated coverage of the newly listed non-banking financial company (NBFC) with a target price of ₹210 per share, implying a 27% upside from its closing price of ₹165 on the listing day. The stock had listed at a 135% premium to its IPO allotment price of ₹70 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.

While the firm remains concentrated on home loans, PhillipCapital expects its construction finance book to remain stable, comprising 8%-10% of the total portfolio.

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Huge IPO Success: Bajaj Housing Finance's listing is seen as one of the most successful IPOs of the year, attracting bids exceeding ₹3 lakh crore for the ₹6,560 crore issue. This marked the largest-ever subscription amount for an IPO in India.

On the listing day, the company's market capitalisation reached ₹1.37 lakh crore, more than doubling from the estimated ₹58,297 crore at the IPO allotment price.

Analysts believe Bajaj Housing Finance's strong fundamentals and the positive outlook for the housing finance sector could lead to sustained returns.

The IPO, which included a fresh issue of equity shares worth ₹3,560 crore and an offer-for-sale of ₹3,000 crore by parent company Bajaj Finance, was conducted to comply with Reserve Bank of India (RBI) regulations. The rules mandate that large non-banking financial companies must be listed on stock exchanges by September 2025.

PhillipCapital estimates that Bajaj Housing Finance’s balance sheet will exceed ₹2 lakh crore within the next three years, supported by benign credit costs in the near term.

Price Action: Bajaj Housing’s share price was up 8.60% at ₹179.19 in early trade on Tuesday.

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