Bajaj Finance launches QIP worth ₹8,800 cr; sets floor price at ₹7,533.81/share

Finance major Bajaj Finance has launched a Qualified Institutional Placement (QIP) issue to raise funds, the floor price for which has been set at ₹7,533.81 per share. The development comes a month after the Non-Banking Financial Company (NBFC) said its board has approved the raising of capital through a QIP worth ₹8,800 crore by issuing equity shares.

The company will also raise funds via a "preferential issue (PI) of up to 15,50,000 warrants" convertible into an equivalent number of equity shares in a period of 18 months from the date of allotment.

"The floor price in respect of the aforesaid issue...is Rs. 7,533.81 per equity share. In accordance with the approval of the members of the company, the Company may, at its discretion, offer a discount of not more than 5% on the floor price so calculated for the Issue," Bajaj Finance says via a stock exchange filing.

An amount equivalent to 25% of the consideration will be payable at the time of subscription and allotment of warrants, and the remaining 75% of the consideration will be payable on the exercise of options against each such warrant, the company adds.

“If the proposed allottee does not exercise the option for equity shares against any of the warrants 18 months from the date of allotment of such warrants, the unexercised warrants will lapse, and the consideration paid by the proposed allottee will be forfeited,” says the company.

The stock price of Bajaj Finance Ltd is trading 0.89% up at ₹7,627 on the BSE. At the current share price, the scrip is trading 6.8% down as compared to the one-year high achieved on June 10, 2023, and its m-cap stands at ₹4.6 lakh crore.

Bajaj Finance is among the top three upper-layer NBFCs as per the Reserve Bank of India (RBI). The deposit-taking investment and credit company reported a consolidated net profit of ₹3,551 crore in the July-September quarter of 2022-23, an increase of 28% from ₹2,781 crore in the same period last year. The company's consolidated net interest income (NII) for Q2 increased 26% to ₹8,845 crore from ₹7,002 crore in the same quarter last year. 

Its assets under management (AUM) grew 33% or ₹20,167 crore to ₹2,90,264 crore as of Q2 FY24 from ₹2,18,366 crore in the year-ago period. The number of new loans booked during the said period grew 26% to 8.53 million against 6.76 million in the same time last year. Bajaj Finance’s customer base recorded 22% growth at 7.6 crore as of September 30, 2023, as compared to 6.2 crore last year. 

Separately, on 16 October 2023, the company entered into a binding term sheet with Pennant Technologies for a 26% equity stake for ₹267.50 crore.