Bajaj Housing Finance IPO: Here's all you need to know about shareholders’ quota

The initial public offering (IPO) of Bajaj Housing Finance Ltd. has created a lot of buzz in the primary markets since its launch date was announced last week. A strong brand name and a solid business are driving huge investor interest in the ₹6,560-crore Bajaj Housing Finance IPO, which is set to open for subscription on September 9.

In anticipation of the huge demand for shares among investors, Bajaj Housing Finance has created a quota exclusively for the existing shareholders of its promoter companies. But who is going to benefit from this quota, and how? Let’s take a look:

What’s the shareholder quota in the Bajaj Housing Finance IPO?

Bajaj Housing Finance has announced that it has reserved a portion of equity shares aggregating up to ₹500 crore under the shareholders’ quota.

The company said that this portion is for individuals and HUFs (Hindu Undivided Family) who are public equity shareholders of its promoters.

Since Bajaj Finance Ltd has a 100% stake in Bajaj Housing Finance and Bajaj Finserv Ltd holds 51.34% in Bajaj Finance, both these companies are classified as promoters for Bajaj Housing Finance.

This means that shareholders who hold even a single share of Bajaj Finance and Bajaj Finserv are eligible to apply for shares under the shareholders’ quota for the Bajaj Housing Finance IPO.

What is the record date to determine eligible shareholders?

According to guidelines issued by the market regulator Securities and Exchange Board of India (SEBI), those who held the parent company's shares on the filing date of RHP (Red Herring Prospectus) would be eligible to apply for the subsidiary company under the shareholders’ quota.

Thus, as of August 30, 2024, those who held shares of Bajaj Finance and Bajaj Finserv in their demat accounts are eligible to apply under the shareholders' quota of the Bajaj Housing Finance IPO.

What can be the bid size in the shareholders’ quota?

Bids in the Bajaj Housing Finance IPO can be made for a minimum of 214 equity shares and in multiples thereafter, but the total bid amount under the reserved portion for shareholders should not exceed ₹2 lakh.

Further, eligible shareholders bidding in the shareholders' reservation portion can also bid in the retail or non-institutional portion and the employee reservation portion (if eligible and subject to applicable limits), and such bids will not be treated as multiple bids.

IPO details

The Bajaj Housing Finance IPO is a 100% book-built issue comprising a fresh issuance of shares and an offer-for-sale (OFS). The fresh issue will be 50.86 crore shares aggregating to ₹3,560 crore, while the OFS would be 42.86 crore shares aggregating to ₹3,000 crore.

The selling shareholder in the OFS is Bajaj Housing Finance’s promoter company Bajaj Finance Ltd.

The price band for the offer is set at ₹66 to ₹70 per share. The lot size, or minimum bid quantity, for an application is 214 shares.

The allotment of shares is expected to be finalized on September 12, while the stock is likely to list on both BSE and the National Stock Exchange of India (NSE) on September 16.