Bajaj Finance to raise ₹12,000 cr via QIP, warrants

Finance major Bajaj Finance in a board meeting today decided to raise ₹10,000 crore via qualified institutional placement (QIP) and convertible warrants.

The company, in a stock exchange filing in the post-market hours, says its board has approved the raising of capital through a QIP for an aggregate amount not exceeding ₹8,800 crore by the issue of equity shares of face value of ₹2 each.

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 to promoter company Bajaj Finserv Limited, for ₹1,200 crore.

Bajaj Finance says it will be seeking approval of the shareholders for the proposed QIP and PI by convening an extraordinary general meeting. Each of the warrants is convertible into an equivalent number of equity shares in a period of 18 months from the date of allotment.

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.

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.

Bajaj Finance holds 31,78,16,130 shares of Bajaj Finance, about a 52.45% stake that'll increase by 52.57% following the conversion of the warrants.

Ahead of the development, Bajaj Finance shares closed in the negative territory. The stock opened a gap up at ₹7,910 on the BSE and surged to an intra-day high of ₹7,913.70. However, the shares of the company closed 0.07% down at ₹7,849.25, taking its m-cap to ₹4,75,601 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 profit of ₹3,437 crore in the April quarter of 2023-24, which increased 32% on a year-on-year basis from ₹2,596 crore in the same period last year.

The company recorded robust performance across all financial and portfolio metrics and delivered the "highest ever assets under management growth of ₹22,718 crore, booked 9.94 million new loans and added 3.84 million new customers in Q1, along with Bajaj Finserv App net users rising to 40.2 million”.

Its net interest income (NII) for the first quarter of the fiscal year increased 26% to ₹8,398 crore, up from ₹6,640 crore in the year-ago period. The number of new loans booked during Q1 FY24 grew 34% to 9.94 million against 7.42 million in 01 FY23, the highest ever new loans in a quarter, Bajaj Finance says in a stock exchange filing.