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Business News/ Companies / News/  Bajaj Finance looks to raise up to 8,500 crore via QIP
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Bajaj Finance looks to raise up to ₹8,500 crore via QIP

Firm has set a floor price for the qualified institutional placement at ₹4,019.78 per share
  • On Monday, shares of Bajaj Finance closed at ₹4,115.95 apiece, up 1.14% on the BSE
  • The company’s plans said that it is targeting to raise up to ₹8,500 crorePremium
    The company’s plans said that it is targeting to raise up to 8,500 crore

    MUMBAI : Consumer lending firm Bajaj Finance Ltd on Monday said that it will raise funds through a qualified institutional placement (QIP) at a floor price of 4,019.78 per share.

    Bajaj Finance did not disclose the size of the fundraise, but one person aware of the lender’s plans said it was looking to raise up to 8,500 crore (about $1.2 billion).

    “Our company intends to use the net proceeds of the issue to augment the long-term resources for meeting funding requirements for our company’s business activities and general corporate purposes and other purpose as per our company’s growth strategy and to meet the capital adequacy norms laid down by the Reserve Bank of India," Bajaj Finance said in a stock exchange filing.

    On Monday, shares of Bajaj Finance closed at 4,115.95, up 1.14% on the BSE.

    Investment banks JM Financial, Axis Capital, Kotak Mahindra Capital, Morgan Stanley and Nomura are advising the company on the share sale.

    QIP is a capital-raising tool, through which listed companies can sell shares, fully and partly convertible debentures, or any securities, other than warrants that are convertible into stocks, to a qualified institutional buyer.

    Bajaj Finance had raised 4,500 crore in 2017 through a QIP. So far this year, eight companies have raised 22,312 crore through the QIP route, data from primary market tracker Prime Database shows.

    Between July and September, Bajaj Finance’s net profit rose 63.11% to 1,506.29 crore, compared to the corresponding quarter of the previous fiscal. Its consolidated assets under management, as of September, grew 38% to 1.35 trillion.

    That was despite sluggish consumer demand in India, as rural household consumption slumped to a seven-year low in the September quarter, plagued by falling crop prices and declining income.

    Besides, the country’s non-bank lenders have also faced a severe credit crisis owing to rising borrowing costs and weak investor confidence, following the collapse of infrastructure lending behemoth Infrastructure Leasing and Financial Services (IL&FS) in 2018.

    Bajaj Finance’s gross non-performing loans (GNPL), including the IL&FS exposure, stood at 1.61% in July-September, reducing marginally from 1.49% in the corresponding quarter of 2018. Its net interest income rose 48% to 3,999 crore during the period, while it booked 6.47 million new loans, compared to 5.6 million in July-September last year. The retail financier’s total customer franchise stood at 38.7 million as on 30 September, showing a year-on-year growth of 29%.

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    ABOUT THE AUTHOR
    Swaraj Singh Dhanjal
    " Based in Mumbai, Swaraj Singh Dhanjal is responsible for Mint’s corporate news coverage. For the past eight years he has been writing on the biggest deals in private equity, venture capital, IPO market and corporate mergers and acquisitions. An engineer and an MBA, he started his journalism career in 2014 with Mint. "
    Catch all the Corporate news and Updates on Live Mint. Check all the latest action on Budget 2024 here. Download The Mint News App to get Daily Market Updates & Live Business News.
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    Published: 04 Nov 2019, 06:09 PM IST
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