Bajaj Finance QIP closure: Stock sinks as company to issue shares at a 4.6% discount

By: | Published: September 8, 2017 3:31 PM

Shares of Bajaj Finance tumbled nearly 4% as the company has decided to issue the shares at Rs 1,690 per equity share at the closure of QIP (qualified institutional placement) today, 8 September 2017.

The stock of the Bajaj Finance fell as much as 3.87% to the day’s low of Rs 1,883 following the announcement on BSE today. (Image: PTI)

Shares of Bajaj Finance tumbled nearly 4% as the company has decided to issue the shares at Rs 1,690 per equity share at the closure of QIP (qualified institutional placement) today, 8 September 2017. The price of Rs 1,690 includes a premium of Rs 1,688 per share from its face value of Rs 2, is at a discount of 4.6% or Rs 81.9 to the floor price of Rs 1,771.90 per equity share, which it had decided in a meeting held on 5 September. The stock of the Bajaj Finance fell as much as 3.87% to the day’s low of Rs 1,883 following the announcement on BSE today.

Bajaj Finance shares were on a rising streak for the last two trading sessions except for today as its shares rose 9.58% over 6-7 September. Yesterday alone, Bajaj Finance shares ended up 5.44% at Rs 1,958.8 on BSE following a stellar response to its QIP of equity shares on the evening of 5 September. The financing company, which is to be inducted into the NSE Nifty 50 index later this month, is now the 29th most valuable company in India with a market capitalisation of Rs 1,07,705 crore at the close of Thursday’s trade.

Bajaj Finance has said, “We intend to use the net proceeds of the issue for augmenting the Tier I capital, as long-term resources for meeting funding requirements for our business purposes, capital expenditure and for other general corporate purposes as per our company’s growth and business related plans from time to time and to meet the capital adequacy norms laid down by the Reserve Bank of India.” 

Earlier this week, Bajaj Finance opened its QIP for an issue of equity shares for bidding by the qualified institutional bidders at a floor price of Rs 1,771.9 per share. The Rs 4,500 QIP was subscribed by 3.5 times the total offer size. Reportedly many long term investors have shown interest in the QIP of Bajaj Finance.  Kotak Mahindra Capital, JM Financial, and Goldman Sachs are the book running managers for the offer.

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