💼 Bajaj Housing Finance Plans ₹7,000 Crore IPO

Hello,
Markets continued their recovery after the election shock as the RBI increased its GDP forecast for FY25 from 7% to 7.2%. Furthermore, the RBI also announced no changes in the repo rate for the 8th consecutive time. Bajaj Housing Finance filed draft papers for a mega 7,000 crore IPO.

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Markets
As of 07/06/24 Market Close

• Sensex and Nifty extended their early gains, closing near record highs on June 7, after the Reserve Bank of India raised the FY25 real GDP forecast to 7.2 percent from 7 percent.

• The sentiment was further boosted by the confirmation of Modi's third consecutive term as the leader of the NDA.

Notable Gainer & Loser
Source: Moneycontrol

Mastek Ltd +8.02%

• Shares of the company surged over 8 percent after the Sunil Singhania-backed firm announced that its cloud-native platform icxPro has partnered with NVIDIA AI Enterprise to enhance customer experience (CX) management across various sectors.

Tata Chemicals Ltd (0.24%)

• Shares declined after Tata Chemicals Europe, a subsidiary, was fined £1.1 million by Chester Crown Court in the UK. Additionally, Morgan Stanley downgraded the stock to 'underweight' and reduced its price target by approximately 7 percent to Rs 843.

Weekend’s Highlights

• Anil Ambani's Reliance Infra plans to raise Rs 2,922 crore ($350Mn) through FCCBs to repay rupee debt and fund expansion. (ET)

• RBI MPC Meeting 2024: A Comprehensive Guide to Key Decisions. (ET)

• Dr. Reddy's Laboratories aims to drive growth in India through acquisitions. (BS)

• NCLT grants permission for insolvency proceedings against Himalayan Mineral Water based on J-K Bank's request. (BS)

• PNB intends to broaden its global presence, with plans to inaugurate a representative office in Dubai. (ET)

• India's EXIM Bank inaugurates East Africa office to enhance business and trade in the continent. (ET)

• Meta launches Meta Verified for WhatsApp Businesses in India and Brazil. (YS)

• Adani Ports secures a 5-year operation and maintenance contract at Kolkata port. (ET)

Featured Highlights
Sources: Financial Express, Mint

RBI Maintains Repo Rate at 6.5%, Raises FY25 GDP Growth Forecast to 7.2%

• Repo Rate Unchanged: The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) decided to keep the benchmark repo rate at 6.5% for the eighth consecutive time, continuing its stance of 'withdrawal of accommodation’.

• GDP and Inflation Forecasts: The RBI raised the GDP growth forecast for FY25 to 7.2% from the previous 7%, while retaining the inflation forecast at 4.5%.

• Policy Measures: The RBI announced several measures, including the review of bulk deposit limits for banks, rationalization of export and import regulations, and the establishment of a Digital Payments Intelligence Platform to enhance financial operations and combat fraud risks.

• Future Rate Cuts Expected: Economists predict that the RBI may begin cutting rates from October 2024, with potential rate adjustments expected in the latter half of FY25, depending on economic conditions and fiscal policies.

• Market Impact: Following the policy announcement, the Sensex and Nifty 50 indices surged over 1%. The RBI's balanced approach aims to sustain economic growth while managing inflation, with a cautious outlook on future policy changes and potential rate cuts.

Bajaj Housing Finance Plans ₹7,000 Crore IPO Following RBI Mandate
Sources: Mint, BS, HT

• IPO Announcement: Bajaj Finance's subsidiary, Bajaj Housing Finance, plans to raise approximately ₹7,000 crore ($838Mn) through an Initial Public Offering (IPO). The IPO will consist of a fresh equity issuance of up to ₹4,000 crore ($479Mn) and an offer-for-sale component worth up to ₹3,000 crore ($359Mn).

• Regulatory Compliance: This decision follows an RBI mandate requiring NBFCs with loan books exceeding ₹50,000 crore ($5.98Bn) to list on stock exchanges by September 2025. Bajaj Housing Finance, with managed assets worth ₹91,370 crore ($10.8Bn) as of March 31, 2024, falls under this requirement.

• Company Performance: In FY24, Bajaj Housing Finance reported a 38% year-on-year growth in net profit, reaching ₹1,731 crore ($207Mn). The company's capital adequacy ratio stood at 21.28% as of March 31, 2024. Home loans accounted for 57.8% of its total assets under management.

• Market Reaction and Future Plans: Following the IPO announcement, Bajaj Finance's share price surged over 5%, reaching an intraday high of ₹7,298 on the BSE. Analysts indicate resistance at ₹7,400 and support at ₹6,600 for Bajaj Finance's shares. The IPO proceeds are intended to strengthen Bajaj Housing Finance's capital base for future lending activities.

• IPO Management: Leading financial institutions, including Kotak Mahindra Capital, BofA Securities India, Axis Capital, Goldman Sachs, SBI Capital Markets, JM Financial, and IIFL Securities, have been appointed as lead book-running managers for the IPO.

IPO / FPO / Issuances

This week’s mainboard IPO schedule

• Bajaj Housing Finance, a subsidiary of Bajaj Finance, files draft papers for an IPO of up to Rs 7,000 crore ($838Mn). (Moneycontrol)

• Ahead of the IPO, Ixigo's parent firm garners Rs 333 crore ($39Mn) from anchor investors. (Moneycontrol)

• Ixigo completes Rs 176 crore ($21Mn) pre-IPO secondary placement. (EN)

• IPOs of Walmart's Flipkart and PhonePe could take a couple of years, according to a Walmart executive. (Moneycontrol)

M&A / PE / Investments

• Mankind Pharma competes with private equity firms to acquire BSV Group, potentially valued at Rs 13,000 crore ($1.55Bn). (ET)

• EV manufacturer Wardwizard announced a Rs 10,000 crore ($1.29Bn) order from Beulah International Development Corporation to innovate the Philippines' public transport with sustainable solutions. (BS)

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