Bajaj Housing Finance Slumps
Shares of Bajaj Housing Finance plunged nearly 9% after promoter Bajaj Finance announced plans to sell a stake worth over ₹1,800 crore via a block deal to meet regulatory norms.
Today's Key Developments
Deep Dive: Why the Stock Tumbled
The sharp decline in Bajaj Housing Finance's share price was a direct reaction to a large block deal initiated by its promoter, Bajaj Finance. The sale was executed to comply with the Securities and Exchange Board of India (SEBI) mandate for Minimum Public Shareholding (MPS), which requires listed companies to have at least a 25% public float within a specified timeframe post-IPO.
1. The Block Deal Explained
Promoter Bajaj Finance offloaded approximately 2.35% of its stake, amounting to roughly 19.5 crore shares. This was a strategic move to increase the number of shares available for public trading and meet regulatory requirements, not an indication of poor company performance. However, such a large supply of shares entering the market at a discounted price inevitably creates short-term downward pressure.
2. The Year-Long Decline
Since its blockbuster listing in September 2024, the stock has been on a downward trend, falling over 23%. This correction is common for IPOs that list at a very high premium. Initial euphoria often gives way to a more realistic valuation as the market assesses long-term fundamentals, lock-in periods for anchor investors expire, and regulatory requirements like MPS trigger large stake sales.
3. Market Sentiment & Technicals
Technically, the stock is now trading deep in an oversold zone, with its Money Flow Index (MFI) and Relative Strength Index (RSI) hitting multi-month lows. While this may attract some value buyers, the overall sentiment remains cautious until the price stabilizes and the market fully absorbs the new float of shares.
