Shares of this large-cap NBFC stock rose 5 percent on Monday after the company’s Board is set to meet in October first week to consider a mega fundraise. In the past six months, the company’s stock has gained nearly 40 percent.
With a market capitalization of Rs 4.73 lakh crores, the stocks of Bajaj Finance Limited opened their trading hour on Monday at Rs 7,594.95 and currently trade at Rs 7,805.25, gaining around 5 percent as compared to the previous closing levels of Rs 7,472.50 apiece.
Such bullish sentiments around the stock were observed after, the company, through a regulatory filing with the Bombay Stock Exchange (BSE), intimated that a meeting of the Board of Directors (BOD) of Bajaj Finance Limited will be held on 5th October 2023 to consider the proposal of raising funds via QIP, preferential issue, or any other mode.
According to various reports, the fundraise is estimated to the tune of $800 million – $1 billion with four investment banks shortlisted for the proposed deal.
Following the development, CLSA, a foreign Brokerage firm, has given a ‘Buy’ call for the NBFC with a target price of Rs 9,500 indicating an upside of around 22 percent compared to the current stock price prevailing in the market.
Digging into the financial performance over the last couple of quarters, the company has shown some positive signs with an increase in operating revenues as well as after-tax profits.
The operating profits have increased from Rs 11,359.59 crores during Q4FY22-23 to Rs 12,497.81 crores during Q1FY23-24, and, the after-tax profits moved up from Rs 3,156.18 crores to Rs 3,434.06 crores during the same time period.
In addition to the above, the profitability indicators of the company have shown improvements with the return on equity (RoE) increasing from 17.59 percent during FY21-22 to 23.7 percent during FY22-23 and the return on capital employed (RoCE) taking a shift from 10.26 percent to 11.76 percent keeping the timeframe the same.
As per the latest shareholding data available, the company’s Promoters hold a 55.87 percent stake, and the Foreign Institutional Investors (FIIs) hold a considerable stake of 20.09 percent in the company.
Bajaj Finance Limited, the holding company for various financial services businesses under the Bajaj Group, serves a wide range of customers by way of providing solutions for asset acquisition through financing. All of the company’s revenue are been generated from domestic operations within India.
Written by Amit Madnani
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