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Bajaj Housing Finance Share Price: Reasons Behind the Fall and What Lies Ahead
Imagine this — you invest in an IPO, get the allotment, and within days your stock more than doubles. Your portfolio turns green, optimism is high, and it feels like you’ve found a wealth-building machine.
That’s exactly what happened with Bajaj Housing Finance Limited when it listed at ₹150 — more than 2x its issue price of ₹70. But soon, the dream run hit a wall. The Bajaj Housing Finance share price is now down over 40% from its peak.
In this article, we’ll understand the top five reasons that led to this downfall and what lies ahead for investors holding Bajaj Housing Finance shares.
Bajaj Housing Finance Limited (BHFL) is a non-deposit-taking housing finance company and a subsidiary of Bajaj Finance Limited. It focuses mainly on mortgage lending services.
The company operates in four major segments:
Home Loans: Traditional housing loans for buyers.
Loan Against Property (LAP): Loans backed by existing property as collateral.
Lease Rental Discounting: Loans based on expected future rental income.
Developer Finance: Financing support to builders and developers.
A majority of its business — about 56.8% — comes from home loans, followed by lease rental discounting (19%), developer finance (12.2%), and loans against property (10%).
Top 5 Reasons Behind the Fall in Bajaj Housing Finance Share Price.
Reason 1: Market Timing and Sentiment Shift.
When Bajaj Housing Finance IPO opened, market sentiment was extremely bullish. The grey market premium (GMP) was over 100%, and the IPO was heavily oversubscribed.
The stock doubled on listing day and even rallied another 25% post-listing. However, investors soon started profit booking.
Notably, the stock got listed on 16th September 2024, just before the market hit an all-time high on 27th September 2024. Soon after, markets corrected sharply, dragging Bajaj Housing Finance along.
Data shows that:
Mutual fund holdings fell from 1.36% to 0.47%
FII/FPI holdings dropped from 1.68% to 1%
Institutional investor holdings declined from 3.62% to 1.93%
In short — the stock wasn’t fundamentally weak; it was the timing that went against it.
Reason 2: Expensive Valuations Compared to Peers.
As market sentiment cooled, valuations became the focal point.
Bajaj Housing Finance trades at a P/BV of 4.93, significantly higher than peers such as:
HUDCO: 2.04
LIC Housing Finance: 0.95
PNB Housing Finance: 1.41
However, these high valuations are backed by superior financial metrics:
NIM (Net Interest Margin): 4% (highest among peers)
GNPA: 0.29% (lowest among peers)
NNPA: 0.13% (again, the lowest)
So yes, the stock is expensive, but it’s also high quality. Still, high valuations made it an easy target when the market turned negative.
Reason 3: End of Anchor Investor Lock-In Period.
After the IPO, anchor investors were restricted from selling for a certain period. Once the 30-day lock-in ended on 12th October 2024, selling pressure emerged.
On 14th October 2024, the stock fell nearly 6% with a massive volume spike of 47.8 million shares — compared to its average daily volume of 10 million.
Later, when the 3-month lock-in ended in December 2024, another wave of selling hit the stock, intensifying the correction.
Reason 4: Sector-Wide Correction in NBFC and Housing Finance Stocks.
The decline wasn’t limited to Bajaj Housing Finance. The entire NBFC and housing finance sector came under pressure due to broader market weakness and slower GDP growth.
From September 2024 highs:
HUDCO: -44%
LIC Housing Finance: -31%
PNB Housing Finance: -28%
Aadhar Housing Finance: -25%
Aptus Value Housing Finance: -20%
Bajaj Housing Finance: -40%
A slowdown in the housing sector directly impacts lenders. When people postpone home purchases, loan growth and asset quality of such companies face stress.
Reason 5: Q3 FY25 Results – Not Bad, But Expectations Were High
Let’s analyze Bajaj Housing Finance Q3 FY25 results compared to Q3 FY24:
| Metric | YoY Growth |
|---|---|
| Assets Under Management | +26% |
| Loan Assets | +31% |
| Net Total Income | +25% |
| Net Interest Income | +25% |
| PBT | +25% |
The numbers look solid, but a few minor declines caught attention:
ROA dropped from 2.5% to 2.4%
ROE fell from 17.8% to 16.3% (mainly due to higher equity base post-IPO)
Overall, results were steady, not weak — but since expectations were sky-high, the market reacted negatively.
What Lies Ahead for Bajaj Housing Finance?
If you look beyond short-term volatility, the long-term fundamentals remain strong.
Over the past five years:
Revenue grew from ₹2,646 crore (FY20) to ₹9,064 crore (TTM) — a CAGR of 28%.
Net Profit rose from ₹421 crore to ₹1,958 crore — a CAGR of 36%.
That’s a remarkable growth trajectory.
Looking ahead, management’s focus will be on three key areas:
Affordable Housing: Targeting high-demand, low-cost housing segments.
Digital Transformation: Leveraging technology for faster, paperless loan approvals.
Lease Rental Discounting: Strengthening alternative lending products.
These strategic initiatives could help Bajaj Housing Finance maintain steady growth once market sentiment stabilizes.
Latest Update (November 2025)
As of November 2025, the Bajaj Housing Finance share price trades near ₹90–₹95 levels, down about 40% from its all-time high but stabilizing after months of correction.
Analysts suggest that valuations have become more reasonable, and institutional buying interest could return once economic indicators improve. The company’s focus on asset quality and affordable housing remains a strong long-term positive.
Conclusion:
The fall in Bajaj Housing Finance share price can be attributed to market timing, high valuations, sector-wide correction, and investor profit booking — not weak fundamentals.
For long-term investors, the company’s growth record, low NPAs, and strong parentage under Bajaj Finance make it a stock worth tracking once market volatility settles.
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