As the business prepares to raise capital through preferred issues or qualified institutional placements (QIPs) in a board meeting on October 5, shares of NBFC juggernaut Bajaj Finance will be in the spotlight this week. According to sources, this financial services company supported by the Bajaj Group is set to reveal a massive $1 billion fundraising strategy. The corporation also announced the day on which its Q2FY24 results announcement would take place.
Bajaj Finance shares last week closed on Friday at Rs
7,809.40 per share, up 0.93% on the BSE. Over Rs 4.73 lakh crore is its market
capitalization. Shares of Bajaj Finance have increased by more than 1.5% in the
trading week that concluded on September 29th, ahead of the board meeting.
Overall, Bajaj Finance closed the month of September up at least 7.5 percent.
The stock has gained almost 37% over the past half-year.
"We would like to let you know that the Bajaj Finance
Limited Board of Directors (the "Board") will meet on Thursday,
October 5, 2023 to: consider, among other things, a proposal for raising funds
through any or all of various methods, including by way of preferential issue
and qualified institutions placement, subject to such regulatory/statutory
approvals as may be required, including approval of the shareholding,"
Bajaj Finance stated in its regulatory filing.
According to the BQ Prime report, Jefferies anticipates
Bajaj Finance to fund $1 billion. According to the brokerage, the company's
return on equity might drop to 22% in FY24E from 23% in the prior fiscal year
(2022-23), if it raises $1 billion, or around 15% of its net worth. However,
Jefferies anticipates that Bajaj Finance's return on assets (ROA) will not vary
from the prior fiscal year, staying at 4.7% for FY24E. The planned funding
should maintain Bajaj Finance well-capitalized.
In addition, Bajaj Finance announced to exchanges on
September 29 that the board of directors meeting for the firm is set for
October 17 in order to review and approve the unaudited standalone and combined
financial results of the company for the quarter and half year ending September
30, 2023. The NBFC participant reported consolidated profit after tax of Rs
3,437 crore in the first quarter of FY24, up 32% YoY, and net interest income
(NII), up 26% YoY to Rs 8,398 crore.
In addition, Bajaj Finance reported the highest-ever quarterly AUM growth of 22,718 crore in Q1, as well as the franchise's highest-ever addition of 3.84 million new customers. Additionally, new loans booked in the first quarter of June 2023 increased by 34% to 9.94 million from 7.42 million in the first quarter of FY23, the most ever. B2B payments increased 37% to 22,625 crores from 16,502 crores in Q1 FY23. Additionally, the deposits book increased by 46% YoY and was 49,944 crore by the end of June 2023. Net deposit growth in the first quarter was 5,278 crore.
By the conclusion of Q1FY24, deposits were responsible for 21% of consolidated borrowings. For FY24, Bajaj Finance predicts that AUM would grow by between 29 and 31%. However, it is sure that by the end of the fiscal year 2023–2024, it will have added 12–13 million additional subscribers. JM Financial has most recently advised purchasing the stock with a target price of Rs 9,500 per share. The fundraising strategy's target price has been determined similarly by CLSA. Axis Securities has a buy rating and a target price of Rs. 8,800.