Shares of Bajaj Finance gained as much as 2.23 percent to Rs 4208.05 apiece on the BSE in the opening deals on Tuesday. The company on Monday launched its Rs 8,500 crore qualified institutional placement (QIP). The shares will be offered in the range between Rs 3,860 and Rs 3,900 apiece.
At 09:28 am, the stock was trading over a percent higher at Rs 4,159.80 on the BSE. It was trading close to its 52-week high of Rs 4,219.50, touched on October 22. In comparison, the benchmark S&P BSE Sensex was ruling 29 points or 0.07 percent lower at 40,272.62 levels.
The shares of Bajaj Finance ended Monday’s session at Rs 4,116. The offer price is at a discount of 5.2 to 6.2 percent to the closing price on Monday. The share sale will help Bajaj Finance expand its lending at a time when non-banking finance companies (NBFCs) sector is plagued by a liquidity crisis.
In 2019, eight companies have raised Rs 22,312 crore through QIPs, against 25 that had raised Rs 16,587 crore in the previous year.
JM Financial, Axis Capital, Kotak Mahindra Capital, Morgan Stanley, and Nomura are advising the company on the share sale. The QIP would make valuation reasonable with the rise in book value.
For the September quarter of the current financial year (Q2FY20), the company posted a 63.11 percent year-on-year (YoY) rise in net profit at Rs 1,506.29 crore. The NBFC had posted a net profit of Rs 923.47 crore in the corresponding quarter last year. Total revenue from operations increased 47.95 percent YoY to Rs 6,322.55 crore during the quarter under review.
Gross non-performing assets (NPAs) and net NPAs recognized as per RBI prudential norms and provisioned as per expected credit loss (ECL) method prescribed in Ind AS stood at 1.61 percent and 0.65 percent respectively. The provisioning coverage ratio at the end of Q2 was 60 percent.