Bajaj Housing Finance files DRHP with SEBI to raise ₹7,000 crore via IPO; Details here

Bajaj Housing Finance IPO: Bajaj Housing Finance has filed it's preliminary draft papers with capital markets regulator Securities and Exchange Board of India (SEBI) to raise funds worth ₹7,000 crore through its upcoming public issue. Parent company Bajaj Finance will offload shares of its housing finance arm via the public issue, according to the draft red herring prospectus (DRHP).

The public issue aggregating up to ₹7,000 crore comprises a fresh issue of equity shares of up to ₹4,000 crore and an offer for sale (OFS) of up to ₹3,000 crore by the selling shareholder, Bajaj Finance Limited, with face value of ₹10 each equity share.

The IPO oncludes a reservation of equity shares for subscription by the eligible employees and a reservation shares of face value of ₹10 each for subscription by the eligible shareholders of promoters including individuals and HUFs who are public equity shareholders of the promoters.

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Bajaj Housing Finance, which offers mortgage lending, intends to utlise the proceeds from the fresh issue to augment the company's capital base to meet future capital requirements and business development for onwards lending.

Kotak Mahindra Capital Company Limited, BofA Securities India Limited, Axis Capital Limited, Goldman Sachs (India) Securities Private Limited, SBI Capital Markets Limited, JM Financial Limited, and IIFL Securities Limited are the Book Running Lead Managers to the issue.

On June 6, the board of Bajaj Finance approved the sale of shares worth ₹3,000 crore in the initial public offering of Bajaj Housing Finance.

The share sale is being conducted to comply with the Reserve Bank of India's (RBI) regulations, which require upper-layer NBFCs to be listed on stock exchanges by September 2025. In September 2022, the RBI released a list of upper-layer NBFCs, or businesses with assets under management of ₹50,000 crore and Bajaj Housing Finance was on the list.

Bajaj Housing Finance Company Details

Bajaj Housing Finance is fully owned by Bajaj Finance, and Bajaj Finserve holds a 51.34 per cent shareholding in Bajaj Finance. The lender is a non-deposit-taking housing finance company registered with the National Housing Bank since September 2015. It offers financial solutions for purchasing and renovating residential and commercial properties.

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The Pune-based  has been identified and categorised as an "upper layer" NBFC by the RBI in India, and its comprehensive mortgage products include home loans, loans against property, lease rental discounting and developer financing.

For the entire financial year 2023-24, the housing lender posted a net profit of ₹1,731 crore, marking a growth of 38 per cent from ₹1,258 crore in FY23. The company's percentage of home loans to total assets under management (AUM) as of March 31, 2024, was 57.8 per cent, down from 61.7 per cent from last year.

Bajaj Housing Finance offers a full range of mortgage products, such as home loans, loans against property, and lease rental discounts. The mortgage lender also offers construction finance and inventory finance to developers. Peer housing finance firms Aadhar Housing Finance and India Shelter Finance have been recently listed on the stock exchanges.

The company also offers finance to developers engaged in the construction of residential and commercial properties as well as lease rental discounting to developers and high-net-worth individuals. Bajaj Housing Finance has the highest credit ratings from CRISIL and India Ratings --with the AAA/Stable for its long-term debt programme and A1+ for its short-term debt programme from both the rating agencies.