Bajaj Finance yet to allot Rs 4,500 crore QIP, but it has already gained double the amount elsewhere

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Published: September 7, 2017 5:59:10 PM

Shares of Bajaj Finance are on a rising streak for the last two trading sessions after a stellar response to its QIP of equity shares on the evening of 5 September.

The shares of Bajaj Finance have more than doubled the investor’s wealth since the beginning of the current year 2017. (Image: PTI)

Shares of Bajaj Finance are on a rising streak for the last two trading sessions after a stellar response to its QIP (qualified institutional placement) of equity shares on the evening of 5 September. However, while the issue, which could fetch the company as much as Rs 4,500 crore and which is yet to be allotted, has already helped the firm gain double that amount of money in another respect — it’s market capitalisation.

Bajaj Finance has gained over Rs 9,400 in market capitalisation in just two days, with its value again topping Rs 1-trillion mark and its shares rising 9.58% over the two trading sessions on 6-7 September. Today alone, Bajaj Finance shares ended up 5.44% at Rs 1,958.8 on BSE, after rising as much as 3.93% yesterday from the previous close. 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. The shares of Bajaj Finance have more than doubled the investor’s wealth since the beginning of the current year 2017.

QIP shares allotment

Earlier this week, Bajaj Finance opened its QIP for 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. The company will decide the issue price including a discount, if any, on or after 8 September for the shares to be allotted to qualified institutional buyers after the QIP, in a meeting of a special committee of the board of directors.

Proceeds of issue

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.” Way back in July 2017, the company’s board of directors had approved to raise Rs 4,500 crore through a qualified institutional placement.

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