Bajaj Housing Finance shares continued their downward trajectory for the second straight session, falling more than 7% today. The stock plunged as much as 7.3%, trading at ₹161.00 apiece on the BSE.
This decline follows a 4.3% drop in the previous session, marking an over 11% fall in just two trading days. The recent correction comes after the stock experienced two sessions of healthy gains following its stock market debut.
Bajaj Housing Finance made an impressive entry into the stock market, with shares being listed at ₹150 per share, a premium of over 114% to the issue price of ₹70 apiece. On September 18, the stock reached a high of ₹188.45, pushing its market capitalization above ₹1.5 lakh crore.
Profit booking has since taken a toll on the stock, as investors rushed to lock in gains after its strong performance.
Profit booking has been a common theme in the stock’s recent performance. After the stellar listing and rally, analysts believe that many IPO investors opted to book profits at higher levels, especially given the high valuations. With the stock hitting new highs in the days following its debut, it became an attractive target for investors looking to capitalize on the early surge.
Avinash Gorakshakar, Head of Research at Profitmart Securities, commented on the situation, saying, “Bajaj Housing Finance shares are likely to witness short-term profit booking after the rally post strong listing.
While the long-term prospects of the company and the housing finance industry in India are positive, the price sustainability for Bajaj Housing Finance stock will take time.” He also mentioned that the current valuations, based on FY24 earnings, look expensive.
Despite the short-term fluctuations, the long-term outlook for Bajaj Housing Finance remains positive, particularly in the context of India’s growing housing finance market.
The housing finance sector has shown robust growth in recent years, supported by increasing demand for housing and government initiatives aimed at boosting the real estate sector. Bajaj Housing Finance, as one of the leading players in the space, is well-positioned to benefit from this trend. However, for now, analysts suggest that the stock may face some turbulence as the market adjusts to the initial price surge.
Gorakshakar advised investors who participated in the IPO to consider booking partial profits at current levels, while suggesting that ₹150 – ₹155 may be an ideal entry point for new investors looking to buy into the stock. He emphasized the importance of patience, as the stock’s price will likely need time to stabilize after the initial volatility.
At 10:10 AM today, Bajaj Housing Finance shares were trading 5.83% lower, at ₹163.56 apiece on the BSE. This marked a continuation of the sell-off that began in the previous session, driven largely by profit booking at higher levels. Investors appeared to be taking a cautious approach, with many opting to lock in gains after the stock’s recent rally.
Despite the recent decline, the company’s strong debut and overall performance in the housing finance market have attracted significant attention from both retail and institutional investors. Bajaj Housing Finance’s growth prospects remain intact, but the stock’s high valuation and recent volatility have raised concerns about its ability to maintain its current price levels in the short term.
Bajaj Housing Finance’s debut on the stock exchange was met with significant optimism, driven by the company’s robust fundamentals and its positioning in the growing housing finance sector.
As is often the case with newly listed stocks, volatility has been a key feature of its early trading days. Investors who participated in the IPO saw substantial gains, but the recent decline highlights the importance of timing when it comes to booking profits.
The stock’s correction over the past two sessions has also come at a time when broader market indices have shown mixed performance. While Bajaj Housing Finance has experienced a sharp pullback, other stocks in the housing finance sector have seen more moderate movements, indicating that the recent sell-off may be more related to profit booking than sector-wide trends.
