Shares of Bajaj Housing Finance Ltd, a Bajaj Group company and a unit of Bajaj Finance Ltd, traded higher by up to 6% on Wednesday, March 19, continuing its upward trend for the second consecutive day.
The stock has gained 14% in the past one month and has almost turned positive for the year so far.
Although the stock is trading well above its IPO price of ₹70, it is still down 34% from its post-listing high of ₹188 despite the recent recovery.
All eyes are on the management of its parent company Bajaj Finance, as the term of its MD and CEO Rajiv Jain ends on March 31. Although he has said that he will continue to be associated with the business, his role after the term ends is unclear.
In an exclusive interaction with CNBC-TV18 on Tuesday, Bajaj Finserv Chairman and Managing Director Sanjiv Bajaj highlighted that Bajaj Finance’s board will meet in the next few days and decide on Rajiv Jain’s role in the group and that he is fully committed to the business and the group.
In view of this, Morgan Stanley has presented a scenario analysis of the direction of Bajaj Finance shares based on Rajiv Jain’s future results. You can read more about it here.
The key date going forward for Bajaj Housing Finance will be April 15, as its one-year shareholder lock-in period will end on this day.
According to a note by Nuvama Alternatives and Quantitative Research, 529 crore shares of Bajaj Housing Finance or 64% of its outstanding equity will become eligible for trading once the shareholder lock-in ends.
It should be clarified that the end of shareholder lock-in does not mean that all 529 crore shares will be sold on the same day, but they will only become tradable.
50% or five of the 10 analysts covering Bajaj Housing Finance have a “sell” recommendation on the stock. Three of them have a “buy” rating, while one analyst has a “hold” call. A consensus estimate of these 10 analysts is that the stock may see a potential downside of 15% going forward.
Bajaj Housing Finance shares are trading 5.7% higher at ₹ 124.35.
