Monday, December 2

Bajaj Housing Finance Initiates IPO Preparation, Aims for $9-10 Billion Valuation

Bajaj Housing Finance Gears Up for IPO, Targets Multi-Billion Dollar Valuation

Bajaj Housing Finance, a subsidiary of Bajaj Finance Ltd, has commenced preparations for an initial public offering (IPO) with the goal of achieving a valuation between $9 billion and $10 billion. The move comes as a result of regulatory requirements imposed by the Reserve Bank of India (RBI) on “upper layer” non-banking financial companies (NBFCs) to list within three years of identification. Let’s delve into the details of this upcoming IPO.

Preparations for IPO:

Bajaj Housing Finance has reportedly entered into preliminary discussions with various investment banks regarding the potential IPO. The company aims to raise approximately $900 million to $1 billion through the IPO, considering the minimum dilution and expected valuation range. However, it should be noted that these plans are subject to change based on market conditions. The IPO is expected to be a combination of primary and secondary issues of shares.

Compliance with Regulatory Timeline:

As per the current regulatory timeline set by the RBI, Bajaj Housing Finance is required to list by September 2025. This mandate falls under the RBI’s scale-based regulation for NBFCs, wherein the upper layer category consists of NBFCs identified by the central bank based on specific parameters and scoring methodology. Bajaj Housing Finance is among the 16 NBFCs listed under the upper layer category, which also includes prominent names like Tata Sons, HDB Financial Services, and Aditya Birla Finance.

Selection of Investment Bankers:

Bajaj Housing Finance has initiated discussions with select domestic and foreign investment banks to form a syndicate of investment bankers for the IPO. The final choice of investment bankers is expected to be made soon, and the IPO process could commence in the coming weeks. This IPO marks the first public offering from the esteemed Bajaj Group in several years, adding anticipation and significance to the event.

Financial Snapshot:

Bajaj Housing Finance, a diversified NBFC, serves a vast customer base of over 76.5 million across India. The company provides finance for the purchase, renovation, and construction of homes and commercial spaces. As of December 31, the company reported assets under management of Rs 85,929 crore, a 31% increase compared to the previous year. Disbursements also witnessed a 31% rise to Rs 25,308 crore, while net profit grew by 41% to Rs 1,350 crore during the nine-month period.

Conclusion:

Bajaj Housing Finance’s decision to prepare for an IPO targeting a valuation of $9-10 billion reflects its commitment to comply with regulatory norms and unlock growth opportunities. As the company progresses with its IPO plans, market conditions and investor sentiment will play a crucial role in shaping the final offering. This anticipated IPO not only showcases the financial strength and potential of Bajaj Housing Finance but also highlights the broader landscape of the Indian financial markets.

Read More on: Moneycontrol

Also Read: Axis Bank Credit Card Fraud: 5 Actions to Take Immediately


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