Mumbai :
Bajaj Housing Finance, a fully-owned subsidiary of Bajaj Finance, is preparing for its initial public offering (IPO).
The company has received approval from the Securities and Exchange Board of India (SEBI) for this move.
The IPO, valued at approximately Rs 7,000 crore, was applied for in June 2024.
IPO Structure and Usage
The IPO includes the issuance of new shares worth Rs 4,000 crore. Additionally, Bajaj Finance will offer shares worth Rs 3,000 crore for sale.
The proceeds from the Offer for Sale (OFS) will go to the shareholders who sell their shares, while the funds from new shares will be used to strengthen the company’s capital base.
The book running lead managers for this issue are Kotak Mahindra Capital, BofA Securities India, Axis Capital,
Goldman Sachs (India) Securities, SBI Capital Markets, JM Financial, and IIFL Securities.
Reason for the IPO
The IPO is in response to a rule by the Reserve Bank of India (RBI), which requires major Non-Banking Financial Companies (NBFCs) to be listed on the stock market within three years.
For Bajaj Housing Finance, the deadline is September 2025.
The RBI classifies these NBFCs as crucial to the financial system due to their significant role.
Company Performance
Bajaj Housing Finance’s net profit increased by 5% year-on-year to Rs 483 crore for the first quarter of the financial year 2024-25 (April-June 2024).
The company’s assets under management total Rs 97,071 crore, with home loans making up 57% of its portfolio.
In terms of asset quality, the gross Non-Performing Assets (NPA) ratio increased slightly from 0.23% to 0.28%, while the net NPA ratio rose from 0.08% to 0.11% on an annual basis.
