Bajaj Finance (BAF) has scheduled a board meeting on October 5, 2023, to consider raising equity capital by the way of QIP. The company is raising capital intended for growth however the capital-raising proposal came earlier than expected as BAF has historically raised equity capital when leverage is 6.0x-7.0x and currently leverage stands at 5.2x as of June 30, 2023. We believe the company may raise 10-15% of the current net worth, which should translate into Rs. 8,000-10,000 crore, resulting in an increase in 10-13% BVPS despite equity dilution based on FY2024E.
OutlookWe reiterate Buy with an unchanged PT of Rs. 8,800. At the CMP, the stock trades at 7.2x/5.6x its FY2024E/FY2025E BV estimates.
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Bajaj Finance - 26 - 09-2023 - khanDiscover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
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