Bajaj Finance Ltd said that by issuing a bond on a private basis it has raised Rs 755 crore. The Debenture Allotment Committee of the NBFC, allotted 7,550 secured redeemable non-convertible debentures (NCDs) of the face value of Rs 10 lakh each, aggregating to Rs 755 crore at its meeting. The bonds, having a tenor of 729 days, will bear a coupon rate of 4.66 percent per annum. The allotment was made on December 3rd, 2020. The company said that bonds with 729 days tenure would bear a coupon rate of 4.66% per annum and NCDs are rated Crisil AAA with a stable outlook by Crisil.
The company has traveled through the headwinds and emerged stronger with a leaner operating model and robust growth guidance. RBI’s new banking license review has recommended that large NBFCs with greater than Rs 50,000 crore assets with 10-year existence can apply for a banking license. The management to consider the same if it is favorable bodes well for the long-term view of the stock. Growth of 25% for the fiscal year and the opportunity to apply for a banking license has led to the renewed interest of investors in the stock.
Bajaj Finance is likely to become a front-line bank if RBI accepts the inputs of its internal working group. To grant permission to them to run full-fledged operations, the apex bank may make norms tighter as proposed by deputy governor M Rajeshwar Rao recently. A Non-Banking Financial Company can apply for a banking license if the promoters meet the ‘fit and proper’ status.
To get a banking license, the company should have a 10-year track record of successful operations. There is a restricting clause that says that the non-financial business of the promoter group should not exceed 40 %of the group’s total income/total assets. Reserve Bank of India’s panel recommends raising the promoter’s cap to 26% in private banks.
Bajaj finance limited is a non-banking financial company that does consumer financing, wealth management, commercial lending, and Small and medium enterprise financing. It was incorporated as Bajaj Auto Finance Limited on March 25, 1987. Its headquarter is in Pune Maharashtra. The Bajaj Finance company CEO is Sanjiv Bajaj. The company has around 294 consumer branches and above 33 thousand distribution points.
