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Bajaj Finance QIP mops up Rs 8,500 crore

The issue was sold at a price range of Rs 3,860-3,900 per share, a 5.4-6.2 per cent discount to Monday’s closing price.

, ET Bureau|
Updated: Nov 06, 2019, 12.15 PM IST
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IndusInd Bank is looking to raise Rs 20,000 crore and RBL Bank plans a Rs 3,500-crore issue.
Mumbai: Marquee international funds such as BlackRock, Nomura, GIC of Singapore and others have lapped up shares of Bajaj Finance in the Rs 8,500-crore private placement to qualified institutional investors. The issue was subscribed five times and will help India’s fastestgrowing non-bank lender to cut debt and improve a leverage ratio that had increased to 6.6 times in the first quarter of the financial year. SBI Mutual Fund is also one of the investors. Nomura, Morgan Stanley, JM Financial, Kotak and Axis Capital were the managers for the issue.

The issue was sold at a price range of Rs 3,860-3,900 per share, a 5.4-6.2 per cent discount to Monday’s closing price.

“Within few hours of opening, the issue was subscribed,” said a banker involved in the deal. “This has been one of the best performing stock and so the response was huge. It received bids of Rs 42,500 crore against an issue size of Rs 8,500 crore.”

Banks have been in the forefront of fund raising so far this year with Bajaj Finance following Axis Bank, which raised Rs 12,500 crore.

IndusInd Bank is looking to raise Rs 20,000 crore and RBL Bank plans a Rs 3,500-crore issue.

Yes Bank raised Rs 1,930 crore in August and is slated to raise more money from a clutch of local and foreign equity investors later in December.

Bajaj Finance raised $700 million in 2017 when the leverage ratio touched around 6.5-7 times. It has a total capital adequacy ratio of 19.5 per cent and reported a 63 per cent increase in net profit in the second quarter to Rs 1,506 crore.

The firm turned cautious earlier this year on growth and chose to conserve cash in light of the economic slowdown and the liquidity crunch. Its assets under management grew by 38 per cent to Rs 1.35 lakh crore in the second quarter. Though the company guided for a 30-35 per cent growth in assets under management, it cautioned against lending to lifestyle financing along with digital and two-wheeler loans.

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