Bajaj Housing Finance Chairman Sanjiv Bajaj on Friday said that the integration of Housing Development Finance Corp. and HDFC Bank Ltd. last year has been a positive driver for his financial services company as it provides the firm an opportunity to fill the vacuum.
"HDFC was the gold standard. They were always first in line to borrow from the market and was the bell-weather for the future. That space has opened up for us now," said Bajaj in an exclusive interview with NDTV Profit.
A good brand association and healthy business growth will allow Bajaj Housing Finance Ltd. to raise capital and benefit from sectoral tailwinds compared to competitors, said Bajaj, talking about the upcoming IPO that it set to be launched on Sept. 9.
The company, which plans to raise up to Rs 6,560 crore through the initial public offering next week, is projecting a 12-14% growth in the housing market in the coming years and aims to capitalise on the opportunity to compete with bigger players.
"The main differentiator for Bajaj Housing Finance is the ability to borrow with the brand name that provides confidence to the market. The size of our bigger peers is getting capped because they are running out of borrowing options," said the chairman.
Ahead of the IPO, Bajaj is "overwhelmed" by the response to the proposed share sale for a seven-year-old company. "It was necessary to diversify sources of finance, given the size of the loan book and the growth in the Indian market."
The three-day issue will close on Sept. 11 and bidding for anchor investors will be on Friday. Proceeds from this issue will be used towards augmenting the company's capital base to meet future business requirements and onwards lending.
Given the Reserve Bank of India's rule for the upper-layer non-bank finance company to go public by September 2025, Bajaj said the firm did not want to wait for that long to list and chose to hit the market now so it gets a year to comply with all regulations.
Regulations for NBFCs have become tighter in the last 10 years to bring them closer to the standards for banks, he said. "Regulatory scrutiny only strengthens the ecosystem. We look at it proactively and positively," Bajaj said.
HDFC Integration An Advantage
"We have the opportunity to become one of the top housing finance companies in the coming decade. We are a national player and building businesses across home loans, developer financing, and lease rental discounting segments. We have learnt to diversify risk," Bajaj said.
Bajaj Housing Finance's assets under management rose to Rs 97,000 crore in the of June quarter from Rs 74,100 crore in the year-ago period. It primarily focuses on providing mortgage loans to upper-end individual homebuyers as well as large-scale developers in India.
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