Bajaj Finance Shares In Focus This Week On Fundraising Plan; Announce Q2 Results Date

NBFC giant, Bajaj Finance shares will be in focus this week as the company plans fundraising through preferential issues or qualified institutional placement (QIPs) in a board meeting on October 5. As per reports, this Bajaj Group-backed financial services provider is expected to announce a whopping $1 billion fundraising plan. Apart from this, the company also declared the date of its Q2FY24 results announcement.

Last week, on Friday, Bajaj Finance shares closed at Rs 7,809.40 apiece, up by 0.93% on BSE. Its market cap is over Rs 4.73 lakh crore.

Ahead of the board meeting, Bajaj Finance's shares have gained by over 1.5% in the trading week that ended on September 29th. Overall, Bajaj Finance settled September month with an upside of at least 7.5%. The stock's half-yearly gains are around 37%.

In its regulatory filing, Bajaj Finance said, "We wish to inform you that a Meeting of the Board of Directors (the "Board") of Bajaj Finance Limited (the "Company") will be held on Thursday, 5 October 2023 to consider, inter alia, proposal for raising of funds through any or all of various methods including by way of preferential issue, qualified institutions placement, subject to such regulatory/statutory approvals as may be required, including approval of the shareholders of the Company."

As per the BQ Prime report which quoted Jefferies expects Bajaj Finance to raise $1 billion. As per the brokerage, if the company raises $1 billion which is almost 15% of its net worth, its return on equity may fall to 22% in FY24E, compared with 23% in the previous fiscal (2022-23). However, Jefferies expects Bajaj Finance's return on assets (ROA) to remain unchanged at 4.7% for FY24E compared with the previous fiscal.

The fundraising plan is expected to keep Bajaj Finance well-capitalised.

Apart from this, Bajaj Finance on September 29th informed exchanges that the company's board of directors meeting is scheduled on October 17 to consider and approve the unaudited standalone and consolidated financial results of the company for the quarter and half year ending 30 September 2023.

In the first quarter of FY24, the NBFC player reported consolidated profit after tax of Rs 3,437 crore, rising by 32% YoY, while its net interest income (NII) climbed 26% YoY to Rs 8,398 crore. Bajaj Finance also posted the highest-ever quarterly AUM growth of ₹ 22,718 crore in Q1, while it also added the highest-ever new customer of 3.84 million to the franchise.

Further, in June 2023 quarter, new loans booked were up 34% to 9.94 million in Q1 as against 7.42 million in Q1 FY23, the highest ever new loans in a quarter. B2B disbursements were up 37% at ₹ 22,625 crore as against ₹ 16,502 crore in Q1 FY23. Further, deposits book grew by 46% YoY and stood at ₹ 49,944 crore as of 30 June 2023. In Q1, net deposit growth was ₹5,278 crore. Deposits contributed to 21% of consolidated borrowings by end of Q1FY24.

Bajaj Finance estimates AUM growth to be in the range of 29-31% for FY24. While it is confident to add 12-13 million new customers by the end of the financial year 2023-24.

As of the latest, JM Financial has recommended buying the stock for a target price of Rs 9,500 apiece ahead. CLSA has set a similar target price for the fundraising plan. Meanwhile, Axis Securities has set a target price of Rs 8,800 with a buy rating.