Bajaj Finance subsidiary Bajaj Housing Finance experienced its worst weekly performance in two months, with shares declining over 4.5% for the week ending January 23. The stock has faced sustained selling pressure, declining in 11 out of the last 14 trading sessions and reporting weekly gains only twice since November 2024.

Stock Performance Analysis

The housing finance company's shares closed at ₹88.55 on Friday, marking a 2.2% decline for the day. This weekly loss represents the worst performance since early December 2024, when the stock had declined 9%. The sustained decline has brought the stock dangerously close to its IPO price levels.

Dramatic Fall from IPO Success

Bajaj Housing Finance was among the most successful listings of 2024, debuting at a premium of more than 100% from its IPO price of ₹70 per share. The stock reached a post-listing high of ₹188.50 before beginning its descent. The magnitude of the decline has been severe, with the stock now trading just above its issue price after previously commanding a premium of over 100%.

Strong Business Fundamentals Despite Stock Weakness

Despite the poor stock performance, the company's operational metrics show robust growth. For the December quarter, Assets Under Management grew by 23% to ₹1.33 lakh crore, compared to ₹1.08 lakh crore in the previous year. The quarterly AUM increase stood at ₹6,652 crore.

Shareholding Pattern and Regulatory Overhang

The company witnessed a marginal decline in retail shareholders at the end of the December quarter, with numbers falling to 23.8 lakh from 24 lakh in the September quarter. However, retail investors with authorized share capital up to ₹2 lakh increased their stake to 8.76% from 8.09% in the previous quarter.

A significant overhang remains in the form of promoter stake reduction requirements. Bajaj Finance continues to hold over 86% stake in the company, substantially above the 75% minimum shareholding norms mandated by regulations.

Analyst Sentiment and Upcoming Results

Analyst opinion remains divided on the stock's prospects. Among the 12 analysts tracking Bajaj Housing Finance, five have assigned "sell" ratings, four maintain "buy" ratings, and three have "hold" recommendations. The company's board is scheduled to meet on February 2, 2025, to consider results for the December quarter, which may provide further clarity on the company's performance trajectory.

Bajaj Finance Asset Management Company (BFAMC) executed substantial portfolio changes across its flexi cap and large cap funds during January, with a total of 23 stock exits and 13 new entries reflecting active fund management strategies.

Flexi Cap Fund Performance and Changes

The BFAMC Flexi Cap Fund demonstrated positive momentum with its assets under management reaching ₹6,316.00 crore, representing an increase of ₹52.00 crore during January. The fund underwent significant portfolio restructuring with 18 stock exits and 9 strategic additions.

The fund exited positions in Hindustan Copper, V-Mart Retail, Neogen Chemicals, Allied Blenders & Distillers, Grindwell Norton, Vinati Organics, Aditya Birla Capital, Yes Bank, Biocon, Hitachi Energy, GE Vernova T&D, FSN E-Commerce Ventures, InterGlobe Aviation, and DLF. New additions included Federal Bank, Hindustan Unilever, IDFC First Bank, JK Tyre, Kotak Mahindra Bank, Piramal Pharma, Rubicon Research, Titan, and Vesuvius.

Portfolio Composition Shifts in Flexi Cap Fund

Significant changes occurred in the fund's holding percentages, with several stocks experiencing notable increases and decreases in portfolio weightage.

Large Cap Fund Developments

The BFAMC Large Cap Fund experienced a contrasting performance with its AUM declining to ₹1,558.63 crore, down ₹108.50 crore during January. The fund made 5 strategic exits while adding 4 new positions to its portfolio.

The large cap fund exited positions in Aditya Birla Capital, Bharat Electronics, InterGlobe Aviation, Tata Steel, and DLF. New additions comprised Ashok Leyland, Vedanta, Shriram Finance, and Titan.

Large Cap Fund Portfolio Adjustments

The large cap fund's portfolio composition showed substantial shifts, with United Spirits leading the increases and SBI experiencing the largest reduction in weightage.

These portfolio movements reflect BFAMC's ongoing rebalancing strategies as fund managers actively adjust holdings in response to market trends and individual stock performance evaluations.