Bajaj Finance, one of India’s leading non-banking financial companies, is considering raising funds through various methods such as preferential issue and qualified institutions placement. The company’s board of directors met on Thursday, 5 October 2023, to discuss this proposal. This information was shared by the company in an exchange filing in early September.
The stock price of Bajaj Finance has been trading in the red for the second consecutive day. Analysts have noted that the stock is currently hovering around its long-term resistance zone of ₹8,000, which has been acting as a hurdle for the stock for the past two years. Despite this, the overall trend for the stock remains positive. Analysts believe that if the stock can breach the ₹8,000 level, it may see a further upmove towards ₹8,350-8,700 in the near term. The immediate support for the stock is seen around ₹7,650.
In its exchange filing on Tuesday, 3 October, Bajaj Finance reported that new loans booked during the second quarter of the fiscal year 2023-24 grew by 26% compared to the same period last year. The company’s assets under management (AUM) also witnessed a growth of 33% to approximately ₹2,90,200 crore as of 30 September 2023, compared to ₹2,18,366 crore as of 30 September 2022. The company’s deposits book also registered a year-on-year growth of 39% to approximately ₹54,800 crore.
Global brokerage firm CLSA has a ‘buy’ rating on Bajaj Finance’s stock with a target price of ₹7,967.60. The firm believes that despite a negative impact from one festival, Bajaj Finance’s AUM growth of 7% quarter-on-quarter and 33% year-on-year during the second quarter of the fiscal year makes it one of the strongest second quarters since the Covid-19 pandemic. The firm has been adding more than 3 million subscribers per quarter since the third quarter of 2023.
Overall, Bajaj Finance’s strong performance in terms of loan growth, AUM, and customer acquisition has been well-received by analysts. The company’s ability to raise funds through various routes will further strengthen its position in the market. Investors are advised to carefully monitor the trend in spreads and key drivers of AUM growth in order to make informed investment decisions.