Bajaj Housing Fin to raise Rs 3,000 crore via non-convertible debentures

Bajaj Housing Finance (BHFL) plans to raise up to Rs 3,000 crore through non-convertible debentures (NCDs) and increase the share of market borrowing through banking funds. In December 2021, its borrowing mix was 61:39 between banks and markets, respectively.

The strategy is to create a balanced and sustained mix of borrowings, the company said in an investor presentation for the quarter ended December (Q3FY22).

Its overall borrowings stood at Rs 39,128 core, and the mix was 62:38 between banks and markets in September 2021.

India ratings has assigned “AAA” rating to the company's non-convertible debentures. The rating factors in the availability of financial support, if required, from the group and parent Bajaj Finance (BFL), as well as the strong management and operational integration between the two entities.

BFL will also infuse Rs 2,500 crore in equity for business expansion. The capital is expected to support their growth plans for the next 24 months.

Further, BHFL plans to tap the National Housing Bank’s funding that will result in a rise in the tenor of borrowings.

In April-September (H1FY22), the company continued to rely mainly on bank loans and NCDs. However, the Commercial Paper (CPs) proportion increased gradually. The management intends to keep a moderate proportion of CPs in the funding mix. Bank funding accounted for 54 per cent of BHFL’s total borrowings at September-end, followed by NCDs (23 per cent) and CPs (9.5 per cent).

BHFL’s net profit for Q3FY22 rose by 87 per cent to Rs 185 crore from Rs 99 crore in the year-ago period.

Its assets under management (AUM) increased by 39 per cent year-on-year (YoY) to Rs 49,203 crore as of December 2021 from Rs 35,492 crore a year ago. Its capital adequacy ratio (including Tier II capital) stood at 19.37 per cent as of December 31, 2021.