The Bajaj Finance: According to Nomura India, one of the main factors in Bajaj Finance’s consideration of a capital increase has been higher-than-expected growth.
The Bajaj Finance Ltd. board of directors will meet today to discuss a proposal for raising money through a variety of channels, such as qualified institutions placement (QIP) and preferential issuance. Higher-than-expected, according to Nomura India
One of the main justifications for Bajaj Finance’s consideration of a capital raising is expansion. Axis Securities stated that the fund raise, despite the company possessing a solid Tier I capital of 23%, suggests that the company is preparing to realize its long-term growth objectives.
In contrast to current forecasts of 23-24.5 percent, Bajaj Finance will be well-positioned after the fund raising to produce a strong return on equity of 21 percent plus over the medium term, according to Axis Securities.
According to preliminary statistics, Bajaj Finance once again produced sector-leading growth in the third quarter of 2018, and even above its revised asset under management (AUM) growth estimate of 29–31%, according to Nomura.
On October 17, Bajaj Finance will release its results for the September quarter.
Bajaj Finance attracted 35.8 lakh new customers to its portfolio in the third quarter of this year compared to 26.1 lakh in the third quarter of the previous year, according to the NBFC’s provisional statement. The overall number of customers increased by 22% year over year to 7.66 crore. The NBFC reported AUM growth of 33%, exceeding Wall Street forecasts.
“AUM growth of 33 percent YoY suggests that disbursements were strong in most product segments, including 2Ws across multiple OEMs,” Motilal Oswal stated.
In a previous report, the domestic brokerage said that Jio Financial, a recent entry, has already started consumer lending pilots in lifestyle retailers controlled by Reliance Industries. It was suggested that Bajaj Finance’s capital raise may be a covert admission that the NBFC is preparing its capital arsenal for the coming competitive environment.
