NBFC Giant Bajaj Finance To Consider Fundraising Proposal On October 5 Via Preferential Issue, QIPs

NBFC giant, Bajaj Finance to consider a proposal for fundraising in a board meeting scheduled on October 5, 2023. The company plans to raise funds through capital market instruments like preferential issues or qualified institutions placement (QIPs).

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."

Last week, on Friday, the company's stock ended at Rs 7472.50 apiece, marginally down from the previous session's print on BSE. Its market cap stood over Rs 4.52 lakh crore.

In September month, Bajaj Finance raised funds through the issuance of Non-Convertible Debentures (NCDs) on private placements.

On September 20, the company allotted 50,000 Secured Redeemable NonConvertible Debentures (NCD), at the face value of Rs 1 Lakh each, aggregating to Rs 500 crore along with a green shoe option of Rs 2,500 crore. The issue has a coupon rate of 7.79% with a tenure of 3653 days. The coupon payment dates begin from September 20 2024 to 2033. Here, the minimum subscription is Rs 1 crore and thereafter, multiple of 1 debenture unit. The NCDs have a 'AAA/Stable' rating from CRISIL and India Ratings.

Earlier, on September 11, the company allotted 1,19,500 Secured Redeemable Non-Convertible Debentures (NCD) at a face value of Rs 1 lakh each aggregating to Rs 1,195 crore. It has a coupon rate of 7.85%, payable for a tenure of 1827 days. The redemption date is fixed on September 11, 2028.

During June 2023, 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.

In the 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 as of 30 June 2023.

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.

Should investors Buy Bajaj Finance stock price?

At latest, Motilal Oswal has recommended buy rating on Bajaj Finance shares for a target price of Rs 8,000 ahead.

However, Kotak Institutional Equities has recommended 'Reduce' on this NBFC stock for a fair value of Rs 6,800 per share.

Disclaimer:

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