(Bloomberg) -- Bajaj Housing Finance Ltd.’s shares more than doubled in their trading debut after India’s biggest new listing of the year, reflecting a surge of local enthusiasm toward initial public offerings that continue to fuel concern about gush of liquidity pushing up valuations.

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Shares of the home-loan unit of India’s largest shadow lender surged 136% to 165 rupees versus an offer price of 70 rupees, the best-ever first-day gains for IPOs of over $500 million. The company’s 65.6-billion rupee ($781 million) sale drew bids of over $39 billion last week.

India has been a bright spot globally for capital raising, with investors drawn to first-day gains of more than 30% on average this year. A study by the market regulator published this month showed that most retail investors end up selling their half of their holdings in IPOs within a week, underscoring the frenzy that is making authorities nervous.

“Domestic investors are looking for IPO investments as this segment has some valuation comfort versus other parts of the market that remain overheated,” said Pranav Bhavsar, a co-founder of Trudence Capital Advisors Pvt. “The market is flushed with liquidity.”

The buoyant demand from local retail investors and institutions have led to new listings in India raising $8.6 billion in 2024, more than each of the two preceding years, data compiled by Bloomberg show. The rush has been driven in part by the rich valuations for listed stocks that are among the world’s priciest.

Bajaj Housing’s IPO debut is also benefiting from its parent’s strong brand recall and history of stellar returns. Bajaj Finance, part of India’s oldest conglomerates, straddles all segments of financial services, and recently forayed into asset management. The company’s shares have returned about 40% annually over the past 10 years, more than double the NSE Nifty 50 Index.

“The group has a proven track record of wealth creation,” Bhavsar said. “They have come out with a public offering after a long gap, a factor investors had in mind while bidding” despite the higher valuation versus peers, he said.

Bajaj Housing also enjoys access to low-cost funds due to its strong parentage, which gives it an edge over peers, Mumbai-based brokerage Sharekhan said in a note before the IPO. “The company continues to outperform the industry in the last five years with a ~29% CAGR and the growth outlook remains strong.”