Bajaj Finance Ltd. will acquire a 7% stake on a fully diluted basis in RMBS Development Co. for an undisclosed amount.
The acquisition is an opportunity to penetrate and support the development of the residential mortgage-backed securities market, the Bajaj Group NBFC said in an exchange filing on Friday.
The shares will be acquired at a face value of Rs 10 per equity share. The all-cash deal will be completed on or before the end of March this year.
Residential mortgage-backed securities are debt-based assets backed by the interest paid on residential loans.
The entity will act as a market intermediary in the segment for the following purposes:
Facilitating investment/issuance/trade of RMBS.
Extend credit enhancement (including second-loss credit enhancement) for RMBS transactions.
Provide liquidity support in the secondary market for RMBS transactions.
Set up an information repository for RMBS transactions.
Develop standards and guidelines to ensure the standardisation of RMBS transactions.
Create securitisation documents for RMBS transactions.
Leverage a platform to enable price discovery for RMBS transactions, where ecosystem participants come together and finalise the securitisation of RMBS transactions.
Provide warehouse financing and related advisory and structuring services.
Shares of Bajaj Finance closed 1.54% higher at Rs 6,847.70 apiece on Friday, ahead of the announcement, as compared with a 0.61% advance in the BSE Sensex.
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