01 — At a Glance
The Housing Finance Company That Made Bajaj Finance Nervous Enough To Sell
- 52-Week High / Low₹137 / ₹81.4
- FY25 Revenue (Annual)₹9,576 Cr
- FY25 PAT (Annual)₹2,163 Cr
- Full-Year EPS (FY25)₹2.60
- TTM EPS₹2.97
- Book Value₹25.4
- Price to Book3.31x
- Dividend Yield0.00%
- Debt / Equity4.44x
- IPO (Sep 2024)₹6,560 Cr
Auditor’s Opening Note: Bajaj Housing closed FY25 with ₹9,576 crore revenue (+26% YoY), ₹2,163 crore PAT (+25% YoY), and AUM scaling from ₹69,228 crore to ₹1.33 lakh crore in Q3 FY26 (+23% YoY). The business fundamentals are smoking hot. The stock has lost 27.7% in one year. Welcome to the eternal paradox of financial services: great business, mediocre valuations, zero dividend. Meanwhile, parent Bajaj Finance is casually offloading 2% stake, which is not exactly a vote of confidence in its “100% subsidiary.”
02 — Introduction
The Housing Finance Child That Grew Faster Than Its Parent Wanted
Meet Bajaj Housing Finance. Founded in 2008 as a non-deposit HFC, it became a subsidiary of Bajaj Finance Limited — one of India’s most diversified NBFCs — and has spent the last 15 years quietly becoming India’s 2nd largest housing finance company. Not by accident. By design. And apparently, now Bajaj Finance wants to reduce its controlling stake. From 88.75% (Sep 2024) to 86.70% (Dec 2025). Publicly dumping 2% between Dec 2025 and Feb 2026 to meet minimum public shareholding norms.
The headline framing: “Regulatory obligation.” The subtext: “We have better uses for the capital elsewhere.” In Bajaj Finance’s ecosystem (Consumer Finance, Lending, Insurance, Fintech), BHFL is increasingly a marginal contributor to returns. A 100% HFC at a 9.55% ROCE in a 28.2x P/E world doesn’t move the needle when your parent can generate 20%+ returns elsewhere.
But for retail investors who bought the IPO in Sep 2024 at much higher prices? This is the stock that promised housing boom tailwinds and delivered a 27.7% one-year drawdown instead. Yet the business is growing faster than peers, the credit quality remains tight, and the interest rates are finally starting to normalize. There’s a narrative buried here. Let’s excavate.
Concall Snippet (Feb 2026): Management disclosed 23% net AUM addition was “partially offset by higher attrition” — which is management-speak for “customers are moving their loans elsewhere faster than expected.” Balance transfers (loan portability) are running at ~20% annualized prepayment rates. That’s not a growth problem. That’s a competitiveness problem.
03 — Business Model: WTF Do They Even Do?
They Give Mortgages. To Salaried People. With Very Good Credit Scores.
Bajaj Housing is a housing finance company. That means they lend money to buy houses, against property, for construction, and to commercial entities. No deposit-taking. No retail savings accounts. Pure lending. The playbook: raise capital from banks and bond markets, lend it at higher rates, pocket the spread, and try to keep credit losses below 50 basis points.
As of Jun 2025, BHFL had 323,881 active customers across a network of 215 branches in 174 locations across 20 states. The portfolio was 57.5% home loans (the “anchor” product), 10% loans-against-property (LAP), 19.5% lease-rental-discounting (LRD), and 12% developer financing — which is fancy-speak for construction loans. Within home loans, 87.5% were salaried customers (the safest kind), and 75.5% had CIBIL scores above 750 (the cream of the segment).
The business is geographically concentrated in Mumbai/Western India (32% AUM in Maharashtra), Bangalore (22.7%), and Hyderabad (14.8%). If you live in these metro clusters and want to borrow ₹40–50 lakh to buy a flat, BHFL is your first call. The problem: everyone else also knows this, so the competition is fierce.
Home Loans57.5%Lowest Risk
LAP / LRD / DF42.5%Higher Yield
Salaried Mix87.5%Home Loans
CIBIL >75075.5%Prime Segment
Average Ticket Size: Home loans average ₹45.40 lakhs at origination. LAP averages ₹59 lakhs. Developer financing is chunked into larger tranches. The company is NOT playing in the affordable/under-₹15 lakh segment, where margins are compressed and competition is nuclear. They’re playing the “salaried prime” game — and in that game, losing customers to balance transfers at 20% run-rates is a death knell.
💬 If you’re a salaried professional with a CIBIL >750 looking for a home loan, how many times would you hunt for rate comparisons before locking in? Once? Twice? Every competitor is one portability click away.
04 — Financials Overview
Q3 FY26: The Numbers That Should’ve Excited The Stock But Didn’t
Result type: Quarterly Results | Q3 FY26 EPS: ₹0.80 | Annualised EPS (Q3×4): ₹3.20 | TTM EPS: ₹2.97
| Metric (₹ Cr) |
Q3 FY26
Dec 2025 |
Q3 FY25
Dec 2024 |
Q2 FY26
Sep 2025 |
YoY % |
QoQ % |
| Revenue | 2,886 | 2,449 | 2,755 | +17.8% | +4.8% |
| Financing Profit | 890 | 723 | 844 | +23.1% | +5.5% |
| Financing Margin % | 31% | 30% | 31% | +100 bps | flat |
| PAT | 665 | 548 | 643 | +21.3% | +3.4% |
| EPS (₹) | 0.80 | 0.66 | 0.77 | +21.2% | +3.9% |
The Story These Numbers Tell: Q3 revenue grew 17.8% YoY. Financing profit grew 23.1% YoY. PAT grew 21.3% YoY. Annualized EPS at ₹3.20 (vs TTM of ₹2.97). This is growth that would make most companies pop 10% in a day. BHFL decided to stay flat to negative instead. TTM EPS of ₹2.97 ÷ CMP ₹84.1 = P/E of 28.3x. Peer average P/E is 13.47x. You’re paying 2.1x the sector median for a company growing in the low-20s%. The arbitrage is not in your favour.
05 — Valuation: Fair Value Range
Is ₹84 Fair, Or Is The Market Pricing In Mass Delusion?
Join 10,000+ investors who read this every week.
