Bajaj Housing Finance Limited (BHFL), a subsidiary of Bajaj Finance, has submitted its draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (SEBI) for a public market fundraising initiative. The company aims to raise Rs 7,000 crore through an initial share sale.
The IPO comprises a fresh issue of equity shares amounting to Rs 4,000 crore and an offer for sale (OFS) of equity shares worth Rs 3,000 crore by Bajaj Finance.
Proceeds from the IPO will be utilized to bolster the company's capital base in preparation for future requirements.
Bajaj Finance plans to divest around Rs 3,000 crore of its holding in its housing finance arm. Bajaj Housing Finance is a wholly-owned subsidiary of Bajaj Finance, with Bajaj Finserv holding a 51.34% stake in Bajaj Finance.
As of March 31, 2024, the percentage of home loans to total assets under management (AUM) stood at 57.8%, down from 61.7% the previous year.
The IPO includes a reservation for subscription by eligible shareholders of Bajaj Finance Limited and Bajaj Finserv Limited, as well as eligible employees of BHFL, Bajaj Finance Limited, and Bajaj Finserv Limited.
BHFL offers a comprehensive range of mortgage products, including home loans, loans against property, lease rental discounts, construction finance, and inventory finance for developers.
For the fiscal year 2023-24, BHFL reported a net profit of Rs 1,731 crore, marking a 38% year-on-year increase. The capital adequacy ratio, including Tier II capital, stood at 21.28% as of March 31, 2024.
