Bajaj Housing Finance Attracts Rs 1,758 Crore from Anchor Investors Pre-IPO

Bajaj Housing Finance announced on Friday that it has raised Rs 1,758 crore from anchor investors ahead of its initial public offering (IPO). The IPO is set to open for public subscription on September 9 and will close on September 11. The price range for the shares has been set between Rs 66 and Rs 70 each.

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Anchor Investors and Allocation

The company has allocated 25.11 crore equity shares to 104 funds at Rs 70 per share, which is the upper limit of the price band. This allocation includes prominent investors such as the Government of Singapore, Abu Dhabi Investment Authority, Fidelity, Morgan Stanley, Nomura, Goldman Sachs, JP Morgan India Investment Trust Plc, SBI Life Insurance Company, ICICI Prudential Life Insurance Company, HDFC Mutual Fund, Kotak Mahindra Mutual Fund, SBI Mutual Fund, UTI Mutual Fund, and Nippon India Mutual Fund.

IPO Details and Purpose

The upcoming IPO aims to raise Rs 6,560 crore. It comprises a fresh issue of equity shares worth up to Rs 3,560 crore and an offer-for-sale (OFS) of equity shares amounting to Rs 3,000 crore by Bajaj Finance. The proceeds from the fresh issue will be used to strengthen the company's capital base to meet future capital requirements.

Regulatory Compliance

This share sale is being conducted in compliance with the Reserve Bank of India's (RBI) regulations. These regulations mandate that upper-layer non-banking finance companies must be listed on stock exchanges by September 2025. Bajaj Housing Finance is classified as an upper-layer NBFC by the RBI.

Company Background

Bajaj Housing Finance is a non-deposit taking Housing Finance Company registered with the National Housing Bank since September 2015. The company provides financial solutions for purchasing and renovating residential and commercial properties. Its comprehensive mortgage products include home loans, loans against property, lease rental discounting, and developer financing.

Financial Performance

For the financial year 2023-24, Bajaj Housing Finance reported a net profit of Rs 1,731 crore. This marks a significant increase of 38 per cent from Rs 1,258 crore in FY23. The company filed preliminary papers with Sebi in June for a Rs 7,000 crore IPO. This included fresh shares worth Rs 4,000 crore and an OFS component of Rs 3,000 crore by its parent company. Earlier this month, the market regulator approved the company's maiden public issue.

Lead Managers

Kotak Mahindra Capital Company Ltd., BofA Securities India Ltd., SBI Capital Markets Ltd., Goldman Sachs India Securities Private Ltd., and JM Financial Ltd. are the book-running lead managers for this public issue.

In recent months, other housing finance companies like Aadhar Housing Finance and India Shelter Finance have also listed on stock exchanges.