Why Bajaj Finserv's Sanjiv Bajaj Does Not Need A Banking License

The existing licences that the Bajaj Group has are more than sufficient to drive reasonable growth at the group's financial services businesses, according to Sanjiv Bajaj, chairman and managing director of Bajaj Finserv.

"Anything that we are doing is less than one, and we are happy doing it with the licence we have," Bajaj said at the Bajaj Housing Finance initial public offering event.

About a non-bank finance company aiming for a banking licence to garner deposits, Bajaj said that Bajaj Finance already has a deposit licence and that it has helped on the liability side of the business.

The journey of the last 17 years of Bajaj Finance and the housing finance company has shown strong growth, indicating that "our existing licences more than sufficed for us to be able to drive whatever reasonable growth going forward," he said.

The company would be able to grow at a sustainable pace, keeping in mind the opportunities, risk reward, and capital, he said.

On growing competition with other major players in the market, Bajaj said that there is enough space for everyone and that the housing financier has become one of the largest in the space in a short period of time and also a robust one.

Bajaj Housing Finance plans to raise up to Rs 6,560 crore through an initial public offering by next week. This has come as the company aims to comply with the Reserve Bank of India's listing requirement norms.

The mortgage lender is a 100% subsidiary of Bajaj Finance, which in itself is a subsidiary of Bajaj Finserv.

Of the total issue size, Bajaj Housing Finance plans to raise fresh share sales of Rs 3,560 crore and Rs 3,000 crore through an offer for sale from its owner, Bajaj Finance.

When asked if the listing was because of the regulator's push, Bajaj told NDTV Profit that the timeline of the company's listing was a combination of regulatory requirements and equally to do with the size that the company has achieved.

"...at this kind of size, listing makes sense because we are large enough and diversified enough, and of course there is the regulatory requirement," he said.

Bajaj Housing Finance is classified as an upper-layer NBFC by the Reserve Bank of India. According to the rules laid down by the regulator, upper-layer NBFCs are expected to list within three years of the list being created. The timeline to list Bajaj Housing Finance ends on September 30, 2025.

The housing financer's IPO will open for subscription on Monday and will close on Sept. 11. The anchor investor bidding will be on Friday.

The price band of the offer is Rs 66 to Rs 70 per equity share. Proceeds from this issue will be used towards augmenting the company's capital base to meet future business requirements and onwards lending.