MUMBAI – Bajaj Finance has received board approval for raising up to Rs 10,000 crore through qualified institutional placement (QIP) and convertible warrants.
The company plans to raise up to Rs 8,800 crore through the QIP issue, and Rs 1,200 crore via convertible warrants.
The company will issue 15,50,000 warrants on a preferential basis to promoter Bajaj Finserv, and this will be convertible into the equivalent number of shares. The warrants can be converted into equity shares within a period of 18 months from the date of allotment.
Bajaj Finance will receive 25% of the total consideration from the parent during the time of subscription and allotment of warrants, while the remaining will be payable on exercise of the options against the warrants, the company said in a release.
Bajaj Finserv currently holds 31,78,16,130 shares of Bajaj Finance, representing a 52.45% stake. On conversion of all the warrants, the former’s stake in the latter will move up to 52.57%.
The fundraising will further beef up Bajaj Finance’s capital and support the company’s expansion plans.
As of September end, Bajaj Finance had a consolidated net liquidity surplus of about Rs 11,400 crore, according to its provisional disclosures.
Its assets under management stood at Rs 2.9 lakh crore as of September 30, up a sharp 33% from the year-ago period. In the last quarter, the non-bank finance major booked 8.53 million loans, compared to 6.76 million a year ago.
The provisional numbers had no mention of its capital adequacy ratio, but as of June end, it remained strong at 24.61%, with tier-1 capital at 23%.
While the company did not reveal the reason for raising funds of this quantum despite having strong liquidity buffers, analysts feel it is shoring up capital to ward off any possible competition from the entry of Jio Financial.
Ahead of the fundraising announcement, shares of the company ended flat in trade on the National Stock Exchange at Rs 7,850.90.
