Bajaj Housing Finance, a subsidiary of Bajaj Group and promoted by Bajaj Finance and Bajaj Finserv Ltd, filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO) last week on June 7. Bajaj Housing Finance is a non-deposit housing finance company that has been involved in mortgage lending since the financial year 2028.
According to the DRHP, the public issue comprises a fresh share issuance of Rs 4,000 crore, and parent company Bajaj Finance Ltd would sell shares worth an additional Rs 3,000 crore through an offer for sale (OFS).
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The company aims to use the net proceeds from the fresh issue to increase its capital base to fulfill its future business requirements for onward lending. In addition, the company aims to reap the benefits of listing its equity shares on stock exchanges such as improved brand recognition and the establishment of a public market for its equity shares in India. A portion of the proceeds from the fresh issue will be utilised to cover offer expenses. Funds from OFS shall go to the selling shareholders of the company.
According to the prospectus, Kotak Mahindra Capital Company Ltd, BofA Securities India Ltd, Axis Capital Ltd, Goldman Sachs (India) Securities Pvt Ltd, SBI Capital Markets Ltd, JM Financial Ltd, and IIFL Securities Ltd are book-running lead managers. KFin Technologies Ltd is the registrar of the issue.
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Bajaj Housing has not yet disclosed the price band and dates of listing.
Bajaj Housing Finance is fully owned by Bajaj Finance, and Bajaj Finserv owns a 51.34 per cent stake in Bajaj Finance. The lender is a non-deposit-taking housing finance company registered with the National Housing Bank since September 2015. It offers financial solutions for purchasing and renovating residential and commercial properties.
The company reported a net profit of Rs 1,731 crore for the fiscal 2024, up 38 per cent from Rs 1,258 crore in the previous financial year. The company’s percentage of home loans to total assets under management (AUM) stood at 57.8 per cent as of March 31, 2024, down from 61.7 per cent a year ago.
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