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Bajaj Finance’s plans to raise capital will help improve its book value and growth outlook on profit and assets under management, according to HSBC Global Research.
HSBC, in its September note, estimated a capital infusion of approximately 12–15% of Q1 FY24 net worth, ranging between Rs 7,000 crore and Rs 8,000 crore. That implied a dilution of c.1.6–1.7% in the number of shares, the brokerage said.
A fundraising of almost $1 billion could lower the NBFC’s return ratios, according to Jefferies. Though return on equity may fall to 22% in FY24E, compared to 23% in FY23, the company’s return on assets ratio will remain unchanged at 4.7% for FY24E, compared to FY23, the brokerage had said.
The fundraise will, however, keep Bajaj Finance well capitalised with a tier-1 capital adequacy ratio of 23%. The planned capital raise is primarily expected to be for “upfronting of capital to support strong AUM growth” of 32% in Q1, Jefferies said.
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