Non-banking finance company, Bajaj Finance Ltd, is looking to raise around Rs 750 crore through equity in the current fiscal. This will be raised through a preferential issuance of warrants to the promoter — Bajaj Finserv Ltd — and through issuance of additional equity shares to eligible Qualified Institutional Buyers.
The company approved the issuance of six lakh warrants on preferential basis to Bajaj Finserv at an issue price of Rs 651, it said in an announcement to the BSE.
These funds will be used for future growth of Bajaj Finance and should be sufficient for the next three years, said Mr Sanjeev Bajaj, Managing Director, Bajaj Finserv.
“We are looking at about 30 per cent growth in deployment in the current year,” he said.
During the quarter ended June 30, 2011, Bajaj Finserv reported a consolidated net profit of Rs 129 crore, up 95 per cent from Rs 66 crore last year.
Bajaj Finance, the lending arm of Bajaj Finserv, reported a net profit of Rs 91 crore, up 94 per cent from Rs 47 crore. Deployments during the quarter increased 75 per cent to Rs 3,588 crore (Rs 2,047 crore).
Net interest margins saw a compression from 13-odd per cent to 12-12.5 per cent. This year the NIM should be around 11-12 per cent, said Mr Rajeev Jain, CEO, Bajaj Finance.
consumer durable loans
Bajaj Finance is launching an Existing Member Identification (EMI) card for its consumer durable loan customers, which will help simplify the loan application process. It is a closed loop card and can be used at about 3,000 consumer durable stores across the country.
At the time of the first loan the customer can apply for the EMI card. For all subsequent loans, subject to a good track record of repayment, the customer can just swipe the card instead of going through the Know Your Customer process all over again.
This will help Bajaj Finance to cross sell to its existing customers.
“About 30 per cent of consumer durable customers are repeat customers. Out target is to issue about 5 lakh cards in the first year,” said Mr Jain.
Insurance arms
Bajaj Allianz Life Insurance Company's overall profit was Rs 278 crore, against Rs 169 crore in the year-ago quarter. Bajaj Allianz General Insurance Company posted a net profit of Rs 39 crore, against Rs 31 crore last year.
The share of bancassurance in sales increased from 11-12 per cent to 21-22 per cent. This year the company will hire about 20,000-30,000 agents, said Mr Bajaj.
Shares of Bajaj Finance closed at Rs 686.05, up 9.10 per cent, from the previous close, on the BSE, on Wednesday.