Bajaj Housing Finance To Raise Rs 7,000 Crore Via IPO, Focus On Capital Expansion

bajaj housing finance to raise rs 7,000 crore via ipo, focus on capital expansion

Bajaj Housing Finance has submitted its Draft Red Herring Prospectus (DRHP) to the Securities and Exchange Board of India (SEBI) to raise Rs 7,000 crore through an initial public offering (IPO), encompassing both fresh issue and offer for sale components.

The IPO will include an offer for sale (OFS) by Bajaj Finance of equity shares worth Rs 3,000 crore, along with a new issue of equity shares amounting to Rs 4,000 crore. The Pune-based company plans to bolster its capital base with the proceeds, aiming to meet ongoing financial needs and future business requirements, primarily for onward lending.

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Bajaj Finance is set to divest approximately Rs 3,000 crore in its housing finance division through the offer for sale. The net proceeds from the fresh issue will be utilized to enhance the company's capital base, ensuring sufficient funds for its business growth and lending activities.

Bajaj Finserv holds a 51.34% stake in Bajaj Finance, which fully owns Bajaj Housing Finance. As of March 31, 2024, home loans comprised 57.8% of Bajaj Housing Finance's total assets under management (AUM), down from 61.7% the previous year.

The company has reserved portions of the IPO for specific qualified shareholders of Bajaj Finance Limited and Bajaj Finserv Limited, as well as eligible employees of Bajaj Housing Finance Limited (BHFL), Bajaj Finance Limited, and Bajaj Finserv Limited.

Bajaj Housing Finance offers a comprehensive range of mortgage solutions, including home loans, secured loans against property, and lease rental discounts. Additionally, it provides inventory finance and construction finance for developers. For the financial year 2023-24, BHFL reported a net profit of Rs 1,731 crore, marking a 38% year-on-year increase.

As of March 31, 2024, Bajaj Housing Finance's capital adequacy ratio, including Tier II capital, stood at 21.28%, reflecting the company's robust financial health.

This IPO marks a significant step for Bajaj Housing Finance as it seeks to expand its financial capabilities and support its ongoing and future business ventures.

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(With Inputs From ANI Agency)