Bajaj Finance shares rise as fundraising talk brings cheer
Bajaj Finance jumped 4.6%, leading the Nifty gainers in Monday's trading, as investors cheered the lender's plans to raise funds from the market. Analysts said the move, in addition to bolstering the company's capital base, is expected to improve its financial ratios.
The stock closed at ₹7,819.20 on the BSE on Monday off the day's high of ₹7,848.35.
The company said its board will meet on October 5 to consider raising funds through a preferential issue or qualified institutional placement.
The fundraising plan helped the stock shrug off the recent underperformance on account of concerns over rising competition and pricey valuations.
«The stock has seen time and valuation correction and has underperformed the broader markets for almost a year,» said Aniruddha Sarkar, chief investment officer at Quest Investment Advisors. «The Street was concerned about the growth in Bajaj Finance amidst the rising competitive landscape.»
Analysts expect Bajaj Finance to raise around $1 billion though this could not be independently verified.
«The company seems to be eyeing aggressive growth across sectors and is also building up its war chest for competition, especially from Jio Financial Services,» said Sarkar.
Brokerage Jefferies said the stock remains among its top NBFC picks and the fundraising could result in its Book Value Per Share increasing by 11% and Earnings Per Share rising by 6% in FY24.
