Bajaj Housing Finance IPO Set to Launch; Other Top NBFCs Expected to Follow
Bajaj Housing Finance IPO Set to Launch; Other Top NBFCs Expected to Follow
Bajaj Housing Finance is gearing up to launch its initial public offering (IPO) next week, marking a significant event in the financial sector. The IPO is a move to comply with the Reserve bank of India’s (RBI) mandate for ‘upper layer’ non-banking financial companies (NBFCs) to list on stock exchanges by september 2025.
Following Bajaj Housing Finance’s public issue, several other prominent ‘upper layer’ NBFCs are expected to go public within the next year. Among the companies anticipated to launch their IPOs are Tata capital Financial services, HDB Financial services (the NBFC arm of hdfc Bank), and Aditya Birla Finance. These listings are part of a broader trend driven by the RBI’s revised regulations for NBFCs.
Key Points on Upcoming IPOs:
Bajaj Housing Finance IPO: Scheduled to open on september 9, 2024, with a substantial share sale valued at Rs 6,560 crore. This IPO is being conducted to adhere to RBI regulations requiring upper layer NBFCs to be listed.
Other Potential IPOs:
Tata capital Financial Services
HDB Financial Services
Aditya Birla Finance
These companies are expected to launch their public issues in the near future as part of the RBI’s directive.
Context and Implications:
The RBI’s revised Scale-Based Regulation (SBR) framework, introduced in october 2021, categorizes NBFCs into four layers based on data-size, activities, and risk levels. ‘Upper layer’ NBFCs are mandated to list on stock exchanges within three years of being designated as such. This framework aims to enhance governance and address systemic risks, particularly following the financial disruptions caused by the IL&FS and DHFL crises.
Out of the 15 current upper layer NBFCs identified by the RBI, nine are already listed, and Bajaj Housing Finance is poised to join them soon. The remaining NBFCs include Tata Sons, Piramal capital & Housing (which will merge with Piramal Enterprises), and others that are yet to be listed.
Market Reactions:
Industry experts suggest that these upcoming IPOs could inject significant liquidity into the market and offer substantial investment opportunities. Sachin Mehta, director of Investment banking at anand rathi Advisors, noted the potential for increased market interest in quality IPOs. Dharmesh Mehta, CEO of DAM capital, highlighted the transformative potential of a Tata Sons IPO, which could attract substantial domestic and global interest.
Challenges and Developments:
Tata Sons, in particular, has reportedly applied to the RBI to voluntarily surrender its registration certificate to avoid mandatory listing, making its future uncertain. The RBI’s decision on this application will be closely watched, as it could impact the broader IPO landscape.
Overall, the influx of high-quality IPOs, including those from notable NBFCs, is expected to bring more depth and stability to the indian equity markets, addressing the current overheated conditions in mid and small-cap segments.
Bajaj Housing Finance is gearing up to launch its initial public offering (IPO) next week, marking a significant event in the financial sector. The IPO is a move to comply with the Reserve bank of India’s (RBI) mandate for ‘upper layer’ non-banking financial companies (NBFCs) to list on stock exchanges by september 2025.
Following Bajaj Housing Finance’s public issue, several other prominent ‘upper layer’ NBFCs are expected to go public within the next year. Among the companies anticipated to launch their IPOs are Tata capital Financial services, HDB Financial services (the NBFC arm of hdfc Bank), and Aditya Birla Finance. These listings are part of a broader trend driven by the RBI’s revised regulations for NBFCs.
Key Points on Upcoming IPOs:
Bajaj Housing Finance IPO: Scheduled to open on september 9, 2024, with a substantial share sale valued at Rs 6,560 crore. This IPO is being conducted to adhere to RBI regulations requiring upper layer NBFCs to be listed.
Other Potential IPOs:
Tata capital Financial Services
HDB Financial Services
Aditya Birla Finance
These companies are expected to launch their public issues in the near future as part of the RBI’s directive.
Context and Implications:
The RBI’s revised Scale-Based Regulation (SBR) framework, introduced in october 2021, categorizes NBFCs into four layers based on data-size, activities, and risk levels. ‘Upper layer’ NBFCs are mandated to list on stock exchanges within three years of being designated as such. This framework aims to enhance governance and address systemic risks, particularly following the financial disruptions caused by the IL&FS and DHFL crises.
Out of the 15 current upper layer NBFCs identified by the RBI, nine are already listed, and Bajaj Housing Finance is poised to join them soon. The remaining NBFCs include Tata Sons, Piramal capital & Housing (which will merge with Piramal Enterprises), and others that are yet to be listed.
Market Reactions:
Industry experts suggest that these upcoming IPOs could inject significant liquidity into the market and offer substantial investment opportunities. Sachin Mehta, director of Investment banking at anand rathi Advisors, noted the potential for increased market interest in quality IPOs. Dharmesh Mehta, CEO of DAM capital, highlighted the transformative potential of a Tata Sons IPO, which could attract substantial domestic and global interest.
Challenges and Developments:
Tata Sons, in particular, has reportedly applied to the RBI to voluntarily surrender its registration certificate to avoid mandatory listing, making its future uncertain. The RBI’s decision on this application will be closely watched, as it could impact the broader IPO landscape.
Overall, the influx of high-quality IPOs, including those from notable NBFCs, is expected to bring more depth and stability to the indian equity markets, addressing the current overheated conditions in mid and small-cap segments.