Bajaj Housing Finance Shares Skyrocket! Promoter Sells 2% Stake, But Why Analysts Are Urging Investors to BUY!

Bajaj Housing Finance shares saw a significant rebound on December 3rd, gaining nearly 2 percent after a preceding period of decline. The surge came a day after its promoter entity, Bajaj Finance Ltd., divested a 2% stake in the housing finance company. At 11:15 AM, Bajaj Housing Finance shares were trading 1 percent higher at Rs 97.99 on the NSE, having reached an intraday high of Rs 98.80.

This positive movement follows a consecutive three-day fall. The trading volume was substantial, with approximately 2.40 crore shares changing hands by the time of reporting.

Stake Sale Details

• Bajaj Finance Ltd. sold a 1.99 percent stake, equivalent to 16.66 crore shares, in Bajaj Housing Finance.
• The transaction, conducted through an open market operation, was valued at Rs 1,588 crore.
• The average selling price per share was Rs 95.31, according to NSE data.
• Following this sale, Bajaj Finance's shareholding in Bajaj Housing Finance decreased from 88.70 percent to 86.71 percent.

Analyst's Outlook

• Market analyst Nimesh Thakkar expressed a decidedly positive long-term view on Bajaj Housing Finance.
• He suggested that the recent decline presents a valuable buy opportunity for investors.
• Thakkar noted that the stake trimming by the promoter is purely for regulatory compliance and does not signal any negative fundamentals for the company.
• "I am not expecting any further or a big fall in Bajaj Housing Finance from hereon. And if we see any further fall, my suggestion will be buy," he stated.
• He identified strong support for the stock in the range of Rs 92 to Rs 85.
• For the medium term, Thakkar anticipates Bajaj Housing Finance shares could reach Rs 115 to Rs 120.
• His overall recommendation is to "buy on every dip."

Company Background

• Bajaj Housing Finance is a subsidiary of Bajaj Finance Ltd., a prominent Non-Banking Financial Company (NBFC) in India.

Market Reaction

• The stock's positive performance today indicates a recovery in investor sentiment following the stake sale announcement and analyst recommendations.

Impact

• The stake sale, while large in value, is being interpreted by analysts as a non-event for the company's long-term prospects due to its regulatory nature. This should reassure investors.
• Positive analyst commentary and the stock's recovery could attract more buyers, potentially driving prices towards the target levels.
• Impact rating: 7

Difficult Terms Explained

• Promoter Entity: A person or group that originally founded or controls a company.
• Divested: Sold off or got rid of assets or shareholdings.
• Regulatory Compliance: Adhering to the rules and regulations set by governing bodies.
• NBFC: Non-Banking Financial Company; a financial institution that provides banking-like services but does not hold a banking license.
• Bulk Deal: A trade of a large quantity of shares, typically executed in a single transaction.
• Open Market Transaction: A sale of securities conducted on a stock exchange through normal trading channels.
• Support Range: A price level at which a stock tends to stop falling and reverse.