Bajaj Housing Finance's ₹6,560 crore IPO to open next week
Bajaj Housing Finance is set to launch its initial public offering (IPO) between September 9 and September 11, as per the company's red herring prospectus (RHP). The total issue size of this highly anticipated IPO is ₹6,560 crore. This includes a primary portion worth ₹3,560 crore and a secondary portion valued at ₹3,000 crore. The price band for the IPO will be announced on September 3.
Bajaj Housing Finance's IPO valuation and issue size
Bajaj Housing Finance is aiming for an IPO valuation between ₹56,000 crore and ₹59,000 crore. The company had initially planned a larger issue size of ₹7,000 crore as per its draft papers but decided to reduce it. In June, the firm submitted draft papers with SEBI for a ₹7,000 crore IPO that included new shares worth ₹4,000 crore and an offer for sale by its parent worth ₹3,000 crore.
SEBI approval and lead managers for the IPO
SEBI approved Bajaj Housing Finance's IPO earlier this month. The lead managers for the book-running process include Kotak Mahindra Capital, BofA Securities, Axis Capital, JM Financial Ltd, IIFL Securities, Goldman Sachs and SBI Capital Markets. Cyril Amarchand Mangaldas is serving as the legal advisor to Bajaj Housing Finance while KFin Technologies has been appointed as the registrar for this issue.
Bajaj Housing Finance's IPO aligns with RBI's requirement
The decision by Bajaj Housing Finance to go public aligns with the Reserve Bank of India's (RBI) mandatory requirement for "upper layer" NBFCs to list within three years of being notified, i.e., by September 2025. The company is a diversified NBFC that serves over 76.5 million customers across India. It provides financing to individuals and corporate entities for purchasing and renovating homes or commercial spaces.
Bajaj Housing Finance's financial performance and growth
As of March 2024, Bajaj Housing Finance's assets under management (AUM) were ₹9.14 lakh crore. The company has seen an annualized growth rate of 30.9% between FY22 and FY24. The average ticket size for its home loans is ₹46 lakh with an average loan-to-value ratio of 70.5% as of March 31, 2024. In the fiscal year 2023-24, it reported a net profit of ₹1,731 crore marking a significant increase from the previous year's figure of ₹1,258 crore.
Special quota and listing details of the IPO
The IPO will have a special quota for shareholders of Bajaj Finserv and Bajaj Finance, both classified as 'promoters.' The public issue will comprise a ₹4,000 crore fresh issue and a ₹3,000 crore offer-for-sale. Following this, the IPO is expected to be listed on both BSE and NSE. The proceeds from the new shares are intended to strengthen its capital base for future lending activities and cover offer-related expenses.
