Bajaj Housing Finance files DRHP with SEBI to raise ₹7,000 cr via IPO

Bajaj Housing Finance Limited (BHFL), finance service arm of Bajaj Finance, has filed initial public offering (IPO) documents with the market regulator Securities and Exchange Board of India (SEBI) to raise ₹7,000 crore. The IPO of BHFL is going to be the largest since Life Insurance Corporation of India’s (LIC) offering in May 2022.

The public offering of Bajaj Housing Finance comprises a fresh issue of equity shares of up to ₹4,000 crore and an offer for sale (OFS) of shares worth up to ₹3,000 crore with face value of ₹10 each.

The housing finance company intends to use the net proceeds from issuance of fresh equities for augmenting its capital base to meet future business requirements of the company towards onward lending.

As per the DRHP filed with the SEBI, the company has reserved half of the issue for qualified institutional buyers (QIBs), 15% for non-institutional investors (NIIs), and remaining 35% for retail investors. The public offer also includes a reservation of equity shares for eligible employees.

In September last year 2023, the RBI had released the list of 15 NBFCs in the upper layer under scale based regulation for NBFCs. As per the RBI norm, Bajaj Housing Finance shares must be listed by September 2025 under the current regulatory established by the central bank. The board of directors of the company decided to list shares on stock exchanges on June 7, 2024.

Founded in 1926, the financial services businesses of the Bajaj Group are primarily carried out through subsidiaries of Bajaj Finserv - one of which is Bajaj Finance, the parent company of BHFL. The BHFL offers financial solutions such as home loans, loans against property, lease rental discounting, and developer financing to individuals and corporate entities to purchase and renovate homes and commercial spaces.

As on March 31, 2024, BHFL had a network of 215 branches spread across 174 locations in 20 states and three union territories, which are overseen by six centralised hubs for retail underwriting and seven centralised processing hubs for loan processing. The company has been assigned long term credit ratings of CRISIL AAA with stable outlook and ‘IND AAA/stable’ as well as short term of ‘CRISIL A1+ and IND A1+’ borrowings programme.

Kotak Mahindra Capital Company Limited, BofA Securities India Limited, Axis Capital Limited, Goldman Sachs (India) Securities Private Limited, SBI Capital Markets Limited, JM Financial Limited, and IIFL Securities Limited are the Book Running Lead Managers to the issue.