Bajaj Housing Finance has submitted initial documents to the capital markets regulator, the Securities and Exchange Board of India (SEBI), outlining plans to raise Rs 7,000 crore via an initial public offering (IPO). The proposed IPO includes a fresh issue of equity shares of up to Rs 4,000 crore and an offer for sale (OFS) of equity shares valued at Rs 3,000 crore by its parent company, Bajaj Finance, as stated in the draft red herring prospectus (DRHP).
The decision to conduct the share sale stems from the need to adhere to the Reserve Bank of India's (RBI) regulations, which mandate that upper-layer non-banking finance companies must be listed on stock exchanges by September 2025. The funds raised from the fresh issue will be utilised to enhance the company's capital base, ensuring it is well-positioned to meet forthcoming capital needs.
Bajaj Housing Finance, established in September 2015, is a housing finance company registered with the National Housing Bank. It specialises in providing financial solutions for acquiring and enhancing residential and commercial properties. The RBI designated it an "upper layer" non-banking financial company (NBFC). Its array of mortgage products encompasses home loans, loans against property, lease rental discounting, and developer financing.
In the financial year 2023-24, the housing lender recorded a net profit of Rs 1,731 crore, a notable growth of 38 per cent compared to Rs 1,258 crore in FY23. Additionally, housing finance companies Aadhar Housing Finance and India Shelter Finance have recently made their debut on the stock exchanges.
Furthermore, on June 6, the board of Bajaj Finance greenlit the proposal for the sale of shares valued at Rs 3,000 crore in the initial public offering of Bajaj Housing Finance.
Kotak Mahindra Capital Company Ltd, BofA Securities India Ltd, SBI Capital Markets Ltd, Goldman Sachs (India) Securities Private Ltd, and JM Financial Ltd have been appointed as the book-running lead managers entrusted with managing the company's public issue.