Bajaj Finserv Ltd, the financial services arm of the Bajaj Group, has approved the subscription to warrants convertible into an equivalent number of equity shares of its subsidiary Bajaj Finance Ltd for an aggregate cash consideration of ₹5,800 crore.
The subscription will be made through a preferential allotment on a private placement basis. Bajaj Finserv currently holds 51.30% of the total issued and paid-up equity share capital of Bajaj Finance.
Promoter to participate in capital raise
Bajaj Finserv said its participation in the proposed capital raise reflects its support and commitment to Bajaj Finance and is intended to provide confidence to prospective investors.
The company clarified that its decision to participate is not driven by any immediate capital requirement of Bajaj Finance.
Bajaj Finance to remain subsidiary
Although Bajaj Finance is a related party of Bajaj Finserv by virtue of being its subsidiary, the proposed subscription to the specified securities is exempt from related party transaction requirements, the company said.
The allotment of the warrants is expected to be completed within 15 days from the date of the special resolution to be passed by Bajaj Finance shareholders. Bajaj Finance will continue to remain a subsidiary of Bajaj Finserv.
Focus on financial services growth
Bajaj Finance is a deposit-taking non-banking financial company registered with the Reserve Bank of India and classified as an NBFC-Investment and Credit Company.
The company provides financial services across multiple segments and is a key subsidiary within Bajaj Finserv’s financial services business.