Bajaj Finance, Finserv to raise R1,750 crore in FY13

Written by Geeta Nair | Pune | Updated: May 17 2012, 09:24am hrs
Bajaj Finserv and Bajaj Finance finalised their fund raising plans and will raise R1,750 crore in the current financial year. Sanjiv Bajaj, MD of Bajaj Finserv said these funds would be raised separately Bajaj Finserv will raise R1,000 crore while the lending arm, Bajaj Finance would raise R750 crore to fund growth during the current financial year. Bajaj Finserv is the holding company in the financial services arm of the Bajaj Group with interest in life and general insurance, lending, financial advisory and wealth management.

While 2011-12 was challenging, Bajaj expected the current financial year also to be difficult and they would be cautious this year, Bajaj told The Financial Express. About the entry of Bajaj Finserv and its partner, Allianz's, into the mutual fund business, Bajaj said they were not yet ready with their plans and were looking at various alternatives but had not zeroed in on to anything. Bajaj Finserv has got regulatory approval to start the mutual fund business but hey wanted to do something different from the existing models. About the banking foray, Bajaj said they were waiting and watching to see what the RBI guidelines would be.

Bajaj was happy with the performance of Bajaj Finserv in a difficult year for the financial services business. The drop in interest rates had not had any impact on Bajaj Finserv's business and he hoped there would be another cut for business to grow. He said there was a marginal drop in revenues but Bajaj expected to grow especially with the lending business growing very strongly with profits going up 64% to Rs 406 crore from Rs 247 crore during FY12. This was mainly due to the growth in SME loans and consumer finance, Bajaj said.

However, the life insurance business was a lag with a drop in gross written premium. Bajaj sad the growth was negative but this was reducing quarter on quarter. Bajaj said during the month of March they had seen a 11% growth. Bajaj was hopeful that the life insurance business would see growth by the second half of this financial year.

The Bajaj Finserv board on Wednesday approved a fund raising proposal, to raise Rs 1,000 crore. This could be through a rights issue and/or securities convertible into equity shares, by way of a qualified institutions placement, private placements, issuance of ADRs, GDRs. subject to approval of the shareholders of the company. The board also approved the increase in authorized capital of the company from Rs. 75 crore to Rs. 100 crore. Similarly the Bajaj Finance board to approval plans to raise funds to the tune of Rs 750 crore through a rights issue or any other way. Bajaj Finserv holds 60.98% in Bajaj Finance.

The Bajaj Finserv shares was down 1.03% to Rs 709.55 .55 after hitting an intraday high of Rs.733.70 and low of Rs.703.05. The stock was at its 52 week high on May 3, 2012 at Rs 779.85.

Meanwhile, Bajaj Finserv reported a consolidated gross revenues for FY12 at R14,526 crore which was lower by 1.26 % compared with R14,711.83 crore in FY11. Bajaj Finservs fourth quarter revenues were up 3.2% to R4,986.68 crore up from R4,830.64 crore same time last year while net profit was nearly flat at R880.79 crore compared with R872.58 crore same quarter last year. Consolidated income for FY12 from operations was up 60% to R3,903 crore while consolidated PAT before exceptional items grew 37% to R1,338 crore. Profit before tax was up 33% at Rs 2226.22.

Bajaj Finance reported its highest ever yearly profit after tax of Rs 406 crore, which was 64% increase over the previous year with deployments going up 67% to Rs 15,797 crore. Total income for FY12 was up 54% to Rs 2,172 crore. For Q4 FY12, Bajaj Finance reported a 52% growth in profits to Rs 108 crore with assets under management at Rs 13,107 crore. Deployment during Q4 went up 69% to Rs 4,208 crore while total income was up 58% to Rs 623 crore. The loan losses and provisions for Q4 went up 5% to Rs 40 crore which included Rs 14.6 crore one time accelerated provision. Excluding this provision the loan losses and provisions for Q4 would have been down 33%. The company's net NPA for Q4 FY12 is the lowest for the company in the last five years with NPA for the year at 0.12 % as against 0.80% in FY 11. The company infrastructure finance has gone up to 975 crore in its first year in this business.

The Bajaj Allianz Life Insurance Company Limited (BALIC) saw a 22% drop in gross written premium in FY12 to Rs 7,484 crore compared to Rs 9,610 crore in the previous year. The New business premium was down 21% to Rs 2,718 crore in FY12 compared to Rs 3,466 in PY while renewal premium was down 22% to Rs 4,766 crore from Rs 6144 crore in the previous year.