Bajaj Finance plans Rs 10,000 Cr fundraising via QIP & preferential issue

Bajaj Finserv Q2 FY24 Results: Consolidated PAT Rises to Rs. 1,928.96 Cr

In a strategic move unveiled on October 5, Bajaj Finance, a prominent Non-Banking Financial Company (NBFC), has set its sights on raising a substantial Rs 10,000 crore via a combination of Qualified Institutions Placement (QIP) and preferential issue of shares. Of this, a significant sum of up to Rs 8,800 crore will be garnered through QIP, while an additional Rs 1,200 crore will be secured through preferential allotment to its promoter entity, Bajaj Finserv.

In an official statement filed with the stock exchange, the company conveyed its intent to seek approval from shareholders for these financial maneuvers through an Extraordinary General Meeting, in accordance with the relevant provisions and circulars issued by the Ministry of Corporate Affairs.

This development comes on the heels of earlier reports by Moneycontrol indicating Bajaj Finance’s intentions to raise capital through a strategic blend of QIP and preferential issue mechanisms.

Under the proposed preferential issue, Bajaj Finance intends to generate Rs 1,200 crore by issuing up to 15.5 lakh warrants, which will be convertible into an equivalent number of equity shares, to its promoter company, Bajaj Finserv. Upon conversion, Bajaj Finserv’s stake in Bajaj Finance will see a marginal increase from 52.45 percent to 52.57 percent. It is important to note that the final determination of the issue price will be made at a later stage in the process.

Each warrant, when allotted, will possess the capability to convert into an equivalent number of equity shares within an 18-month window from the date of allotment. Should the option to convert these warrants into equity shares remain unexercised, the warrants will subsequently lapse.

Bajaj Finance’s stock experienced a marginal decrease, closing at Rs 7,849.25 on the day preceding the announcement of this fundraising endeavor.

Earlier in the week, the company released key consolidated business metrics for the quarter ending on September 30. Notably, Bajaj Finance reported a remarkable 26 percent growth in new loans booked during the July to September quarter, reaching 85.3 lakh loans compared to 67.6 lakh during the same period the previous year.

Additionally, the company’s deposit book showed significant expansion, rising to approximately Rs 54,800 crore as of September 30, 2023, from Rs 39,422 crore in the corresponding month of the previous year—an impressive year-on-year growth of 39 percent.

Bajaj Finance’s assets under management (AUM) also witnessed robust growth, increasing by 33 percent to approximately Rs 290,200 crore by the end of September, as compared to Rs 218,366 crore at the same time the previous year. The company emphasized, “AUM in Q2 FY24 grew by approximately Rs 20,100 crore,” underscoring its continued financial vigor and expansion.

About Bajaj Finance:

Bajaj Finance Limited is a deposit-taking Non-Banking Financial Company, authorized and regulated by the Reserve Bank of India (RBI). The company maintains a diverse lending portfolio that serves retail, SMEs, and commercial clients, demonstrating a strong presence in both urban and rural regions of India.

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