Tale of the Tape 

Good evening everyone. Welcome back to the market of stocks!

Nifty and Sensex gave up early gains to finish flat. Midcaps (+0.4%) and Smallcaps (+0.2%) followed suit. The advance-decline ratio was in favour of the bears (3:2).

Most sectors ended in the green. Energy (+0.8%) and Metals (+0.6%) were the top gainers. FMCG (-0.7%) saw the most selling pressure.

Bajaj Housing Finance had a monster listing. Read our top story to find out where the stock goes from here.

UBS believes that Hero MotoCorp’s insane ride is finally over. More details below.

Northern Arc Capital IPO kicked off today. Check out our analysis below to help you decide whether to subscribe.

BSE was the top NSE 500 gainer after rallying +18%. PS - CNBC says a potential NSE IPO could’ve been a possible trigger.

Adani Power (+5%) and Adani Green Energy (+8%) gained after bagging key projects from the Maharashtra govt and securing a $1.3 billion transmission line deal in Kenya.

Brokerage reactions. Stove Kraft (+8%) soared after Emkay Global said it sees a +44% upside from current levels. Also, Union Bank of India was up +3% after Investec upgraded the stock.

Rice stocks jumped after the GOI removed the minimum export price on basmati rice. Kohinoor Foods (+20% upper circuit), LT Foods (+7%) and KRBL (+6%) all saw solid gains.

Dixon Technologies jumped +7% after its subsidiary inked a deal with Asus to make laptops in India.

India Shelter Finance Corporation cracked -9% after 65 lakh shares (nearly 6% equity) changed hands in a big block deal; reports say an unidentified VC firm was the likely seller.

Here are the closing prints:

Stock
Dhamakedaar Listing! 💥 

Bajaj Housing Finance lived up to its IPO hype. The stock closed at Rs 165 p/sh; +136% from its issue price! But has the IPO craze given us an overstretched monster that may struggle going forward? Let’s take a look.

Some would say that the madness was warranted. After all, Bajaj is the 2nd largest home finance firm with Rs 91,370 cr in assets under management. Metrics like disbursals and asset quality are off the charts! Little wonder it got over Rs 3.2 lakh cr in bids, the highest for any IPO since Reliance Power in Jan 2008.

Having said that, the listing has been equally INSANE! With a market cap of Rs 1.37 lakh cr, Bajaj Housing Finance is bigger than Eicher Motors, Shriram Finance, and Dr Reddy’s Laboratories. Lol.

Valuation-wise even at Rs 70 p/sh, it would’ve traded at 3.2x price-to-book ratio. This is significantly higher than most peers like Can Fin Homes (2.6x), PNB Housing Finance (1.9x) and LIC Housing Finance (1.2x). But, at current levels, Bajaj Housing Finance is quoting at +6x, which is just bonkers.

Most experts agree that the stock is not going anywhere. For those who won the lottery, feel free to sell. For those who didn’t, look carefully at other private housing NBFCs, which could get better valuations now. As Capitalmind’s Krishna Appala notes: "We see that this IPO may lead to a re-rating of private NBFCs in the markets, which have grown at 15-20% in the past three years, but the stocks have not performed much.”

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