Bajaj Housing Finance Files Preliminary Papers for Rs 7,000 Crore IPO

Bajaj Housing Finance, a subsidiary of Bajaj Finance, is gearing up for a major financial move as it has filed preliminary papers with the Securities and Exchange Board of India (SEBI) to raise a whopping Rs 7,000 crore through an initial public offering (IPO).

The proposed IPO includes a fresh issue of equity shares worth up to Rs 4,000 crore and an offer for sale (OFS) of equity shares amounting to Rs 3,000 crore by parent company Bajaj Finance, as per the draft red herring prospectus (DRHP).

The funds raised from the IPO will be utilized to strengthen the company’s capital base to meet future capital requirements. This strategic move is also in compliance with RBI regulations, which mandate upper-layer non-banking finance companies to be listed on stock exchanges by September 2025.

Bajaj Housing Finance, a non-deposit-taking housing finance company registered with the National Housing Bank since September 2015, offers financial solutions for purchasing and renovating residential and commercial properties. The company has been categorized as an “upper layer” NBFC by RBI and provides a range of mortgage products including home loans, loans against property, lease rental discounting, and developer financing.

In the fiscal year 2024, Bajaj Housing Finance reported a net profit of Rs 1,731 crore, marking a significant growth of 38 percent from the previous year. The board of Bajaj Finance has already approved the sale of shares worth Rs 3,000 crore in the IPO of Bajaj Housing Finance.

Leading financial institutions like 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 for managing the company’s public issue.

The move by Bajaj Housing Finance to go public comes in line with the RBI’s regulations for NBFCs and is part of a broader trend of housing finance companies entering the stock market. This development is expected to bring in a new wave of opportunities for investors and further strengthen the company’s position in the financial market.