Bajaj Finance Proposes Massive ₹550,000 Crore Borrowing Limit

Bajaj Finance Ltd's Board of Directors met on April 29, 2026, to approve a significant increase in the company's aggregate borrowing limit. The proposal aims to raise the limit to ₹550,000 crore from the current ₹375,000 crore, enhancing financial flexibility for strategic objectives and expansion.

This move is subject to shareholder approval at the upcoming Annual General Meeting. Fundraising will primarily occur through debt instruments, including non-convertible debentures (NCDs) in Indian and foreign currencies.

Why the Higher Limit Matters

For a rapidly growing Non-Banking Financial Company (NBFC) like Bajaj Finance, a higher borrowing limit directly translates into greater capacity for lending and business expansion. This increased debt ceiling allows the company to support a larger Assets Under Management (AUM) base, which is crucial for sustaining its growth momentum. It also signals the company's confidence in its future revenue streams and its ability to manage increased leverage responsibly.

History of Funding Growth

Bajaj Finance has a consistent track record of accessing capital markets to fuel its expansion. It has successfully raised substantial funds through NCD issuances, including ₹5,120 crore in January 2026 and ₹2,004.31 crore in April 2026. The company previously secured shareholder approval for significant borrowing limits, such as the up to ₹500,000 crore limit approved in March 2015. Its AUM stood at ₹416,661 crore as of March 2025.

Implications of the Decision

If approved by shareholders, the proposed increase will significantly enhance Bajaj Finance's debt-raising capability. The expanded borrowing capacity provides the financial strength to pursue larger growth opportunities, potentially accelerating AUM expansion. It also offers greater flexibility in managing its funding mix and meeting future capital requirements.

Potential Risks and Oversight

The primary risk is the dependency on shareholder approval for the borrowing limit increase. Failure to obtain this could impact future fundraising plans. While not directly related to this proposal, Bajaj Finance has faced regulatory oversight. In July 2024, the IRDAI imposed a ₹2 crore penalty for regulatory violations, and in October 2023, the RBI fined it ₹8.50 lakh for non-compliance with fraud monitoring directions. Governance concerns have been raised historically, such as a 2014 report on director compensation, though these are not recent issues.

Industry Context: Peer Funding

Bajaj Finance operates within a competitive NBFC landscape. Cholamandalam Investment and Finance Company Ltd, a major diversified NBFC, reported an AUM of ₹210,704 crore as of December 2025, utilizing a mix of debt and securitization for funding. Poonawalla Fincorp Ltd is another growing player, targeting over 40% AUM growth in FY26 with an AUM of ₹41,273 crore in Q1 FY26, also actively tapping debt markets. These peers highlight the industry's reliance on debt capital markets.

Key Financial Metrics

• Bajaj Finance's consolidated Assets Under Management (AUM) reached ₹416,661 crore in FY25.
• The company's consolidated Debt-to-Equity ratio stood at 3.77x as of March 2025.

What to Watch Next

The immediate focus will be on the outcome of the shareholder vote at the Annual General Meeting regarding the borrowing limit increase. Investors will also track subsequent announcements on the terms, tenure, and specific instruments for the proposed fundraising activities. Further observation will be on how the enhanced borrowing capacity is utilized to drive AUM growth and support new business initiatives.