Bajaj Finance's Secured NCD Issuance: A Strategic Move for Capital Structure Optimization and Credit Stability

Bajaj Finance's recent secured non-convertible debenture (NCD) issuances in 2025 have sparked significant investor interest, particularly as the company navigates a complex financial landscape. While the total amount of these issuances-aggregating to approximately ₹6,681.48 crore across four tranches-does not yet align with the user's cited figure of INR 18,897.8 million, the strategic implications of these raises remain critical to understanding the company's capital structure optimization and long-term financial health. This analysis examines how Bajaj Finance's secured debt strategy balances growth ambitions with credit rating stability, while enhancing shareholder value.

Capital Structure Optimization: Secured Debt as a Strategic Tool

Bajaj Finance's 2025 secured NCD program includes four major tranches: ₹1,276.48 crore (April 28), ₹1,500 crore (July 8), ₹1,350 crore (September 12), and ₹1,555 crore (September 29), according to a Financesaathi report, as reported by Business Today and in a Finblage report. These issuances, with tenures ranging from 3 years to 5 years and coupon rates between 7.11% and 7.37%, reflect a deliberate effort to diversify funding sources while maintaining a favorable debt profile.

The company's debt-to-equity ratio, which stood at 3.00 as of March 2025-a 44.59% decline from 5.41 in March 2024-is highlighted in a TopStockResearch analysis. By prioritizing secured debt, Bajaj Finance mitigates refinancing risks and ensures liquidity for its lending operations, which expanded to 97.12 million customers in Q3 2025 according to the Q3 2025 earnings highlights. The secured nature of these NCDs, backed by a first pari-passu charge on book debts and loan receivables (1.00x coverage), further strengthens the company's ability to meet obligations without compromising operational flexibility, as noted in an Investywise notice.

Shareholder Value: Profitability and Growth Synergies

Bajaj Finance's Q3 2025 consolidated profit after tax of ₹4,308 crore-a 18% year-over-year increase-was presented in the company's Q3 FY25 investor presentation. The proceeds from the NCD issuances are explicitly earmarked to strengthen the funding base and support the lending business, which is critical for sustaining growth in a competitive non-banking finance sector.

Moreover, the company's strategic partnerships, such as its collaboration with Bharti Airtel to offer nine new products on the Airtel Thanks App, position it to capitalize on India's expanding digital economy, as evidenced in the Moneycontrol ratios. By leveraging low-cost, long-term debt, Bajaj Finance can fund these initiatives without diluting equity, thereby preserving earnings per share (EPS) growth and rewarding shareholders.

Credit Rating Stability: Balancing Leverage and Risk

Despite the increase in total debt to ₹2.832 trillion as of March 2025 (per CompaniesMarketCap), Bajaj Finance's capital adequacy ratios remain robust, with Tier-1 capital at 20.8% and overall capital adequacy at 21.6% (reported in the Q3 2025 earnings highlights). These figures, well above regulatory minimums, suggest that the company's leverage is manageable and unlikely to trigger downgrades. Credit rating agencies are likely to view the secured NCDs favorably, as they reduce reliance on unsecured debt and provide a stable maturity profile. For instance, the 5-year tranche (maturity: September 2030) aligns with long-term asset durations, minimizing mismatch risks, as previously reported by Finblage.

Addressing the Discrepancy: Total Issuance and Future Outlook

The user's reference to INR 18,897.8 million likely conflates Bajaj Finance's total debt with its 2025 NCD program. As of the latest available data, the 2025 secured NCDs total ₹6,681.48 crore, while the company's overall debt stands at ₹2.832 trillion (CompaniesMarketCap). However, the incremental capital from these issuances will further optimize the capital structure, potentially enabling future raises at favorable rates. Investors should monitor upcoming tranches and the company's ability to maintain its debt-to-equity ratio below historical averages (3.82 over five years), as shown by TopStockResearch.

Conclusion

Bajaj Finance's 2025 secured NCD program exemplifies prudent capital management, balancing growth imperatives with credit discipline. By securing long-term, low-cost funding, the company not only supports its lending ambitions but also safeguards shareholder value through sustained profitability and operational scalability. For investors, the key takeaway is clear: Bajaj Finance's strategic use of secured debt is a testament to its financial resilience, positioning it as a compelling long-term investment in India's evolving financial services sector.