Bajaj Finance Raises Rs 5,000 Crore Via NCDs

Rs 5,000 crore total issuance size at an 8.15% annual coupon rate.
10-year tenure maturing on August 27, 2036.

Reader Takeaway: Secures long-term capital for lending growth while providing robust protections for institutional debt investors.

What just happened

Bajaj Finance has finalized a private placement of Secured Redeemable Non-Convertible Debentures (NCDs) amounting to Rs 5,000 crore. The allotment was formally cleared by the company's Debenture Allotment Committee on August 27, 2026. These debentures will be listed on the Wholesale Debt Market of the BSE.

Why this matters

This capital infusion is a strategic move to lock in long-term liquidity for the company’s extensive lending portfolio. By securing funds at an 8.15% coupon for a decade, Bajaj Finance effectively manages its cost of funds and liability profile to support ongoing credit expansion across its diverse consumer and SME business segments.

Security and Covenants

The debt is backed by a first pari-passu charge on the company's book debts and loan receivables. The company has implemented a tiered asset cover structure, requiring 1.10x cover for original investors and 1.00x for subsequent holders, ensuring debt security.

Special Rights and Protections

The NCDs feature investor-friendly safeguards to mitigate credit risk. These include a "step-up" clause allowing original investors to increase interest rates by 25 basis points per notch if ratings slip to 'AA-' or lower. Furthermore, a "recall option" enables investors to demand full principal repayment if the credit rating drops to 'A' or below, providing a significant layer of protection.

What to track next

Investors should monitor the company's asset-liability management (ALM) statements in upcoming quarterly reports to see how this Rs 5,000 crore addition integrates into the broader debt maturity profile.