Mumbai25 minutes ago
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Bajaj Housing Finance Limited, a subsidiary of Bajaj Finance, is preparing to launch Initial Public Offering i.e. IPO soon. The company has filed Draft Red Herring Prospectus (DRHP) papers with the Securities and Exchange Board of India (SEBI) to launch the IPO.
The company wants to raise Rs 7,000 crore through this IPO. Bajaj Housing Finance has given this information in its exchange filing. According to the company’s DRHP, the proposed IPO of Bajaj Housing Finance will involve a fresh issue of equity shares worth up to Rs 4,000 crore. Apart from this, parent company Bajaj Finance will sell equity shares worth Rs 3,000 crore of its Bajaj Housing Finance through Offer for Sale (OFS).
The company will use the funds to meet future capital requirements.
The company will use the funds raised from the fresh issue to meet future capital requirements by increasing its capital base. Bajaj Housing Finance is selling its shares to comply with Reserve Bank of India (RBI) regulations. Under RBI rules, upper-layer non-banking finance companies are required to be listed on stock exchanges by September 2025.
This is the reason why Aadhaar Housing Finance and India Shelter Finance have recently been listed on the stock exchanges. Bajaj Housing Finance is a non-deposit taking housing finance company registered with National Housing Bank since September 2015. It provides financial solutions for purchasing and renovating residential and commercial properties.
RBI has placed Bajaj Finance in the category of upper-layer NBFC.
RBI has placed Bajaj Finance in the category of upper-layer NBFC. It offers multiple mortgage products including home loan, loan against property, lease rental discounting and developer financing. The housing lender reported a net profit of Rs 1,731 crore for FY24, up 38% from Rs 1,258 crore for FY23. The board of Bajaj Finance had on June 6 approved the sale of shares worth Rs 3,000 crore in the IPO of Bajaj Housing Finance.
RBI had announced the list of NBFCs on September 14.
On September 14, RBI had announced the list of Non-Banking Finance Companies i.e. NBFCs for the year 2023-24. RBI had included 15 companies in the list of upper layer NBFCs under scale based regulation. LIC Housing Finance is on top in this list. Bajaj Finance is at second place, Shriram Finance is at third place and Tata Sons Private Limited is at fourth place.
In view of the increasing size of the NBFC sector and the increasing impact of the risks associated with it on other sectors, the Reserve Bank had issued new rules for NBFCs from October 2022. In this, 4 categories of NBFC have been created according to size and business.
The purpose of the category is to increase the regulations required for a company as it expands. In simple language, the rules for NBFCs-upper layer are almost the same as those for banks. According to the rules, the top 10 NBFCs of the country remain in this list and apart from these, the Reserve Bank can include any other company in it if it wants.
