Bajaj Housing Finance Shares PLUNGE Near IPO Price: Is Promoter Selling Creating a Buying Opportunity?
Bajaj Housing Finance shares have crashed nearly 50% from their peak. The stock that debuted at Rs 150 with massive hype in September 2024 is now trading close to its IPO price of Rs 70.
On December 2, 2025, the stock hit a fresh 52-week low of Rs 94.90 after promoter Bajaj Finance announced plans to sell 2% stake through block deals.
This dramatic fall has left many investors wondering if this is a trap or a golden opportunity to buy quality at discount.
The promoter selling at Rs 95-97 per share has created panic among retail investors who entered at higher levels.
But here is the twist. The company fundamentals remain strong with 25% AUM growth and rock solid asset quality at 0.26% GNPA.
The selling is not because of business problems but to meet SEBI minimum public shareholding norms. Bajaj Finance currently holds 88.70% stake and needs to bring it down to 75% by regulatory deadline.
The question every investor is asking now is simple. Is this blood on the street moment the perfect entry point or should you stay away from this falling knife.
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Bajaj Housing Finance was once the star of Indian IPO market. The company raised Rs 6,560 crore in September 2024 with record breaking subscription of 67 times. Retail investors poured in Rs 3.2 lakh crore bids making it India most bid IPO ever.
The stock listed at Rs 150 against issue price of Rs 70 giving 114% listing gains. Within days it zoomed to Rs 188-190 levels creating massive wealth for allottees. But the party did not last long.
The stock started falling from October 2024 onwards. By December 2025 it crashed to Rs 94.90 losing nearly 50% from peak. The immediate trigger was promoter Bajaj Finance announcing stake sale on December 1.
The company filed with exchanges that it will sell up to 16.66 crore shares representing 2% equity in one or more tranches between December 2 and February 28, 2026. The floor price was set at Rs 95 per share which was 9% discount to previous close of Rs 104.50.
On December 2 a massive block deal happened. Reports suggest 19.5 crore shares worth Rs 1,890 crore changed hands at Rs 97 apiece. The stock opened gap down at Rs 97.25 and fell further to touch Rs 94.90 during the day.
Trading volumes exploded with over 452 million shares changing hands compared to normal 5-10 million daily volume. By end of day the stock closed at Rs 97.15 down 7% from previous close. The selling continued in following sessions taking monthly loss to 13% and yearly decline to 28.85%.
Many retail investors felt cheated seeing promoter selling at discount. But the reality is different. This is not distress sale but regulatory compliance.
SEBI mandates all listed companies must have minimum 25% public shareholding. This means promoters can hold maximum 75% stake. Bajaj Finance currently owns 88.70% which is way above the limit. The company needs to reduce stake by 13.70% to comply with rules.
RBI also has specific regulations for upper layer NBFCs. These companies must be listed on exchanges and meet public shareholding norms. Bajaj Housing Finance being subsidiary of Bajaj Finance falls under this category.
The deadline to comply is approaching which forced the promoter to start selling. The entire reduction will not happen in one go. Bajaj Finance will sell in multiple tranches till February 2026 depending on market conditions.
The promoter has given written undertaking that neither Bajaj Finance nor Bajaj Finserv will buy shares on days when sale happens.
This is standard SEBI requirement to ensure genuine public float increase. The sale is being done through block deals which are large transactions executed at negotiated prices. The discount of 5-10% is normal in such deals to attract institutional buyers who take big positions.
Here comes the interesting part. Despite stock crashing the business is doing very well. In Q2 FY26 ended September 2025 the company reported strong numbers.
Net profit grew 18% year on year to Rs 643 crore. Total income increased to Rs 2,755 crore from Rs 2,410 crore last year. Assets under management expanded 25% to Rs 1.27 lakh crore showing healthy loan book growth.
The real strength lies in asset quality. Gross NPA stands at just 0.26% which is among best in industry. This shows the company lending practices are solid and customers are repaying loans on time. The housing finance business focuses on premium segment borrowers who have good credit profiles. Loan against property is another key area which also has quality borrowers.
Return on equity is targeted at 13-15% which is respectable for housing finance company. The company maintains good capital adequacy and liquidity position. Being part of Bajaj Group gives it advantages like lower cost of funds and cross selling opportunities.
Bajaj Finance customers who need home loans can be easily converted to Bajaj Housing customers. This ecosystem benefit is not available to standalone housing finance companies.
The management has guided for 24-26% AUM growth for full year FY26. If margins remain stable this should translate into similar profit growth. The company has no major asset quality concerns or governance issues. The selling is purely for regulatory compliance not because promoters see problems ahead.
Market opinion is divided into three camps. First group says this is golden buying opportunity. They argue that getting quality company at 50% discount from peak is rare.
The fundamentals are intact and promoter selling creates temporary pressure which will reverse once overhang clears. Prashanth Tapse from Mehta Equities called the situation somewhat disheartening but noted short term pressure is expected.
Second group is cautious. They point out that more selling is coming in next 2-3 months as promoter reduces another 10-12% stake to reach 75% level. This supply overhang will keep stock under pressure. Also housing finance sector faces competition from PSU banks who offer cheaper home loans. There is risk of customers switching to lower rate lenders which can hurt margins.
Third group is bearish. They call this typical IPO trap where retail gets lured at high prices and promoters exit later. Social media is full of complaints from investors who bought at Rs 150-190 levels. They feel cheated seeing promoter selling at Rs 95. Some analysts warn that if margin compression happens due to competitive pressure the stock can fall further toward Rs 80-85 levels.
Technical charts show stock trading below all major moving averages. The 50 day average is at Rs 105 and 200 day at Rs 120. Breaking these levels triggered more selling. However RSI is below 30 indicating oversold conditions. Historically when RSI falls this low stocks tend to bounce back in short term. Support exists at IPO price of Rs 70 which is psychological level.
This is million dollar question troubling investors. Let us look at both sides. The bull case is compelling. You are getting proven business with 25% growth, clean balance sheet, and Bajaj brand backing at price to book of 4x. Six months ago same stock traded at 8x book value. The valuation has become reasonable after correction. Parent Bajaj Finance is strong performer and housing finance is strategic growth area for them.
The promoter selling offers rare chance to buy directly from owners at discount. Usually retail has to buy from market at higher prices. Here the promoter is giving you shares at Rs 95-97 which is attractive entry point. Once regulatory compliance is done and overhang clears institutional buying can resume. Many IPO stocks see similar pattern where promoter selling creates dip followed by recovery in 6-12 months.
The bear case is equally valid. There is still 10-12% more selling to come over next 2-3 months. This will keep pressure on stock.
If market corrects or banking sector sees weakness Bajaj Housing will fall further. Competition in housing finance is intense with banks offering 8-8.5% rates while NBFCs charge 9-10%. Margin compression risk is real if rate competition increases.
Valuation at 4x book is not dirt cheap for housing finance company. Many good housing finance stocks trade at 2-3x book. So there is still room for downside if sentiment worsens. Also buying falling knife can be dangerous. The stock can go to Rs 80-85 before finding bottom. Those who buy at Rs 95 may have to wait long time to see profits.
For existing investors who bought at higher prices the damage is done. Selling now at Rs 95 after buying at Rs 150-180 means booking 40-50% loss.
If you believe in long term story it may be better to hold and wait for recovery. The business fundamentals have not changed. Once overhang clears and quarterly results keep coming good the stock should recover in 12-18 months.
For new investors wanting to buy the approach should be cautious. Do not buy full position at Rs 95. The stock can fall another 10-15% to Rs 80-85 levels. Better strategy is to buy in small quantities and average down if it falls more. Wait for promoter selling to complete by February end. Once supply overhang clears and stock stabilizes you can add more.
Look for technical confirmation like stock closing above Rs 105 for two consecutive weeks. This will signal bottom formation. Also check Q3 results due in January 2026. If AUM growth continues at 25% and asset quality remains strong it will give confidence. Any signs of margin pressure or rising NPAs should be red flag to stay away.
For long term investors with 2-3 year horizon current levels around Rs 95-100 can be decent entry point for small position. But keep position size small as more volatility is expected. Housing finance sector has good long term potential as India home ownership is still low and credit penetration is increasing. Bajaj brand and execution capability give them edge over smaller players.
The key is not to get emotional. This stock taught harsh lesson that IPO hype does not always create wealth. Many retail investors lost money by buying at listing gains without understanding valuation. The current fall is opportunity to learn and apply disciplined investing approach. Quality companies do give second chances but you need patience to wait for right price.
Tags: Bajaj Housing Finance, Bajaj Housing shares, promoter stake sale, IPO stocks India, housing finance stocks, stock market crash, SEBI MPS norms
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