Bajaj Housing Finance Plans Growth Without Additional Capital for the Coming Years

Bajaj Housing Finance Ltd (BHFL), led by Chairman Sanjiv Bajaj, has announced that it will not require additional capital for its expansion needs in the foreseeable future. The company has successfully raised ₹6,560 crore through its initial public offering (IPO), which is set to open between September 9 and 11, 2024. This IPO marks the group's first public offering in 31 years and aims to support the company’s growth without further capital infusion.

In an interview with Mint, Sanjiv Bajaj, who also serves as the Chairman and Managing Director of Bajaj Finserv, stated that the focus is on building a robust, scalable business model similar to that of HDFC, one of India's leading housing finance companies. "We are constructing a diversified book with a balanced approach, considering the vast opportunities in India's mortgage sector. The sky's the limit, and it’s just about making sensible growth decisions in the coming years," Bajaj said.

Bajaj Housing Finance is also preparing to comply with the Securities and Exchange Board of India's (SEBI) regulation that limits the promoter's stake in a company to 75%. Currently, Bajaj Finance holds a 100% stake in BHFL, which will be reduced by approximately 11% after the IPO. Bajaj stated, "We will assess the mix and quality of investors brought in through the IPO and build a diversified portfolio of investors as the company grows."

IPO| Bajaj Housing Finance IPO Set to Open from September 9-11; Aims to Raise Rs 6,560 Crore

The IPO details, as per the red herring prospectus (RHP), include a total issue size of ₹6,560 crore, comprising a primary portion of ₹3,560 crore and a secondary portion of ₹3,000 crore. The price band will be announced on September 3, with the anchor portion scheduled for September 6, 2024.

Bajaj Housing Finance, with assets under management (AUM) of ₹79,071 crore, plans to maintain a diverse portfolio, including home loans, developer loans, lease discounting, and loans against property. The company has also launched affordable housing loans this year but remains cautious about expanding this segment too quickly. Atul Jain, Managing Director of Bajaj Housing Finance, commented, "The affordable housing loan mix will grow gradually. Even though this segment offers attractive yields, we aim to reach customers with affordable products without significantly increasing operational expenses."

READ| AU Small Finance Bank Seeks Universal Banking License Amidst Merger with Fincare SFB

Looking forward, Bajaj Housing Finance is committed to building a strong foundation for future growth, with no immediate need for additional capital, while navigating regulatory requirements and market conditions.

[Disclaimer: This article is for informational purposes only and does not constitute investment advice. Please consult a financial advisor before making any investment decisions.]