Bajaj Finance turns to new equity as its borrowings outrun its capital

On 1 October 2026 the board of Bajaj Finance approved a plan to raise ₹17,500 crore, subject to a shareholder vote. The money would come from a placement of new shares with large institutional investors and from warrants issued to the parent, Bajaj Finserv. Management told analysts the money is for growth. On 4 August it had said the first step would most likely be selling down part of its stake in its housing-finance subsidiary, and that it did not foresee raising capital.

That August remark came with a condition: a raise would be considered if growth kept accelerating. Growth did accelerate. Assets under management, the loans the lender runs, rose 26.5% from a year earlier in the three months to September, and management now expects 26% to 27% growth for the full financial year, against the 20% to 24% it guided in April.

The strain shows in the balance sheet. Through the last financial year, borrowings and shareholders' equity grew in step, and each rupee of equity carried ₹3.13 of borrowings at both ends of that year. In the six months since, borrowings rose 14.8% while equity rose 7.5%, and the figure climbed to ₹3.34. These are Inve's filed figures, which are not the consolidated accounts management discusses and sit on a different basis from its own leverage measure, so they show the direction rather than the company's ratio.

A lender's equity grows mainly from the profit it keeps, and lending growth beyond that pace has to be financed with debt. Total assets rose 13.5% in the six months, well ahead of equity, and most of the gap was borrowed: borrowings rose ₹47,826 crore of the ₹50,761 crore by which assets outgrew equity. Against that balance sheet the planned raise is large, equal to about 15.8% of equity at the end of September, calculated from the filed figures.

Management presents the raise as a matter of growth and resilience. It has lowered the leverage level at which it says the company should raise capital, arguing that a lender of its size needs a bigger buffer, and says it has three years to sell down the housing-finance stake, a timeline it says it is on track to meet, putting its own share sale ahead of the housing-finance stake sale.

The raised guidance also says something about the months ahead. Calculated from the rounded book reported for March and the September figure, the new range means adding roughly ₹29,000 crore to ₹31,500 crore a quarter from October to March. That is less than the book added in each of the first two quarters of the year, so even the higher figure assumes slower additions, which fits management's account of trimming lending in drought-hit areas over recent months. The festival season makes the second half uneven, so the figure describes an average pace rather than a quarter-by-quarter path.

Shareholders still have to approve the plan. Once the money arrives, the filed balance sheet will show whether borrowings per rupee of equity falls back toward the 3.13 it stood at at both the start and the end of the last financial year.