Bajaj Housing Finance, a subsidiary of Bajaj Finance, revealed its big move: the approval of an initial public offering (IPO) plan aimed at raising a whopping ₹4,000 crore. This strategic move involves both fresh issue of shares and an offer-for-sale (OFS) component.
According to the company’s statement released today, the IPO will include a mix of fresh shares and shares from existing stakeholders. This decision was made during the company’s board meeting held on June 6, 2024.
However, this ambitious plan is still subject to various factors including market conditions, regulatory approvals, and other clearances. The company is determined to navigate through these challenges to ensure a successful IPO.
The roots of this decision can be traced back to September 2022 when the Reserve Bank of India (RBI) listed Bajaj Housing Finance among the upper-layer non-banking financial companies (NBFCs) with assets under management exceeding ₹50,000 crore. According to RBI regulations, companies on this list must be listed on stock exchanges by September 2025.
Despite regulatory hurdles, Bajaj Finance has been flourishing financially. In the fourth quarter of fiscal year 2024, the company witnessed a remarkable 21.1% year-on-year growth in net profit, amounting to ₹3,824.53 crore. Similarly, its net interest income (NII) also surged by 21.1% compared to the corresponding quarter of FY23.
This IPO announcement comes on the heels of recent challenges. In April, Bajaj Finance requested the RBI to lift restrictions on two of its lending products, “eCOM” and “Insta EMI Cards.” These products were banned by the RBI in November 2023 due to insufficient information provided to borrowers. The Insta EMI card provides consumers with pre-approved credit for small purchases, while eCOM offers financing for online shopping on e-commerce platforms.
Investors seemed optimistic about Bajaj Finance’s future, as evidenced by a positive uptick in its stock price. On Thursday, shares of Bajaj Finance Ltd closed at ₹6,923.25 on the Bombay Stock Exchange (BSE), marking a 1.22% increase from the previous session.