Mumbai: Bajaj Housing Finance Ltd will not require more capital to meet its growth requirements for the next few years as it completes raising ₹6,560 crore through the initial public offering this month.
Speaking to Mint, CMD Bajaj Finserv, and chairman Bajaj Housing Finance Sanjiv Bajaj said that the housing finance company is focussed on building a business similar to HDFC that is focussed on excellence and scale. The IPO is the first from the group after a gap of 31 years.
“The balanced way in which we are building our diversified book coupled with the kind of opportunities that there are for mortgage business in the country, the sky's the limit,” said Bajaj. “It’s just a question of building it sensibly in the coming years.”
Bajaj also said that they will have to reduce stake in the housing finance company in a phased manner over the next 3 years to meet Securities and Exchange Board of India's (Sebi) regulatory requirement of capping the promoter's stake at 75%. However, he said that a call will be taken after the IPO, which will see Bajaj Finance's 100% stake in the HFC getting diluted by nearly 11%.
“We will see what the mix of the quality of investors is that we are now bringing into the IPO. Then we will build a diversified portfolio of investors as the company grows,” said Bajaj. "Given our ability to access other elements in the capital markets, we have not felt the need to go to private equity."
Bajaj Housing Finance’s IPO will open between 9 September and 11 September, according to the firm's red herring prospectus (RHP).
The total issue size is ₹6,560 crore (primary portion of ₹3,560 crore and secondary portion of ₹3,000 crore). The price band will be issued on 3 September while the anchor portion will be on 6 September, according to the RHP filing.
With assets under management of ₹97,071 crore, Bajaj HFC is looking at maintaining its current diversified portfolio of home loans, developer loans, lease discounting and loan against property. While it launched the affordable housing loans this year, the company is cautious about growing this book.
“Mix of affordable housing loans will grow gradually. Even though affordable is attractive from a yield point of view, we want to see how to reach customers with affordable housing products without being opex heavy,” said Atul Jain, MD, Bajaj Housing Finance.
