Bajaj Finance Expands Liquidity via Diverse Bond Issuances Amid Strong Financials

Bajaj Finance Limited, one of India’s leading non-banking financial companies (NBFCs), has been aggressively tapping into debt markets to bolster liquidity and fund its growth ambitions. Recent banker commentary reveals the company accepted bids for multiple tenor bonds, including reissues of short-term and long-term instruments, underscoring its strategic approach to capital management.

Bond Issuance Details: A Diversified Tenor Strategy

Bankers highlighted two major bond issuance plans in Q1 2025:
1. April 15, 2025 Deal: Bajaj Finance raised ₹30 billion ($350 million), including a ₹25 billion greenshoe option, via a 3-year-and-2-month bond rated AAA by Crisil. The coupon rate was determined through bidding.
2. April 25, 2025 Deals: The company targeted ₹25 billion ($294 million) across three tenors:
- 2-year-and-2-month bonds (₹5 billion base + ₹2.5 billion greenshoe).
- 5-year-and-2-month bonds (₹5 billion base + ₹2.5 billion greenshoe).
- A reissue of 7.3763% June 2028 bonds (₹15 billion potential via greenshoe).

The greenshoe options provide flexibility to upscale funding if demand exceeds expectations, a common tactic in buoyant debt markets.

Key Highlights of Recent Issuances

• May 2025 Reissue: A ₹20 billion bond (₹5 billion base + ₹15 billion greenshoe) carries an 8.06% coupon, maturing in 11 months. This short tenor aligns with near-term liquidity needs.
• April 2035 Reissue: A 10-year bond with a 7.55% yield raised ₹12.5 billion, leveraging Bajaj Finance’s AAA rating to attract conservative investors.
• Total Fundraising: Combined Q1 2025 issuances target ₹55 billion, reflecting aggressive capital-raising to fuel growth in retail lending, SME financing, and commercial segments.

Financial Strength Anchors Investor Confidence

Bajaj Finance’s robust financials underpin its ability to access debt markets at favorable terms:
- Assets Under Management (AUM) rose 31% YoY to ₹354,100 crore as of June 2024, driven by strong loan growth.
- Deposits surged 26% to ₹62,750 crore, signaling customer trust.
- Net Liquidity Surplus: A comfortable ₹16,200 crore as of June 2024, mitigating refinancing risks.
- Profitability: Consolidated net profit jumped 21% to ₹3,824.53 crore in Q4 FY24, with 30% total income growth.

Regulatory Tailwinds and Strategic Moves

The RBI’s lifting of restrictions on products like “eCOM” and “Insta EMI Card” in May 2024 catalyzed a 10% YoY rise in new loan bookings in Q1 FY25. This operational recovery supports Bajaj Finance’s ability to service debt and reinvest proceeds into high-growth areas.

Market Context and Competitive Edge

In a crowded NBFC space, Bajaj Finance distinguishes itself through:
1. AAA Credit Ratings: Crisil’s top rating reduces borrowing costs and widens investor appeal.
2. Diversified Portfolio: Exposure to retail, SME, and commercial lending limits sector-specific risks.
3. Greenshoe Flexibility: Over-allotment options signal confidence in market demand.

Conclusion: A Prudent Play for Investors

Bajaj Finance’s multi-tenor bond issuances reflect a well-structured capital strategy, balancing short-term liquidity needs with long-term growth. With an AAA rating, robust financials, and a 31% YoY AUM expansion, the company is positioned to capitalize on India’s credit growth opportunities.

Investors should note that the 8.06% coupon on the May 2025 bond offers attractive yield potential, while the 7.55% April 2035 bond provides stability for long-term portfolios. The ₹55 billion Q1 fundraising target, combined with a 10% rise in loan bookings, signals confidence in the company’s ability to navigate regulatory changes and sustain growth.

In a market where NBFCs face liquidity scrutiny, Bajaj Finance’s strong fundamentals and strategic debt management make it a reliable investment, especially for those seeking exposure to India’s financial sector.

Data as of April 2025. Always conduct due diligence before investing.