Bajaj Fin launches QIP issue

Our Bureau Chennai | Updated on November 04, 2019

Bajaj Finance logo on building.

Fixes floor price at ₹4,019.78/share

The board of directors of Bajaj Finance on Monday approved the launch of qualified institutional placement issue, for which its has set a floor price at ₹4,019.78 apiece, the lender said in an exchange filing. On Monday, shares of Bajaj Finance closed at ₹4,115.95 apiece, up 1.14 per cent on the BSE.

Though Bajaj Finance did not disclose the size of the fund raise, according to market sources, it plans to raise up to ₹8,500 crore.

Earlier in the company’s board and in October, its shareholders, had approved raising of capital through a QIP for an aggregate amount not exceeding ₹8,500 crore.

Bajaj Finance intends to use the net proceeds of the issue to augment its long-term resources for meeting funding requirements of its business activities and general corporate purposes besides to meet the RBI capital adequacy norms.

The board will meet again November 7 to finalise the issue size and other QIP formalities.

Bajaj Finance had posted a 63 per cent y-o-y rise in net profit at ₹1,506.29 crore for the quarter ended September 2019, as against ₹923.47 crore recorded in the corresponding quarter of last year. Total revenue from operations increased 47.95 per cent y-o-y to ₹6,322.55 crore.

Global investment advisor Jefferies while retaining its ‘Buy’ recommendation on the stock with a price target of ₹4,750 said: Bajaj Finance’s asset quality was stable q-o-q. Loan growth moderated slightly, but was still robust. Falling marginal funding cost may aid margins. We expect higher credit cost near term, but this should ease. Opex leverage gains, strong fee income growth and lower tax rate, should lift RoA/ROE.

Published on November 04, 2019

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