Bajaj Finance raises US$392.7M through secured NCDs
What's the deal? Bajaj Finance has allotted secured redeemable non-convertible debentures (NCDs) worth US$392.8M (roughly $34.7M) through a private placement. The company's debenture allotment committee finalised the issuance on May 12, 2026, allotting 2,892,000 NCDs with a face value of US$1.36K each.
The issuance is split into two tranches. Option I consists of 107,000 NCDs totalling US$145.4M at 7.77% annual interest, maturing on April 17, 2029. Option II comprises 182,200 NCDs totalling US$247.4M at 8.00% annual interest, with a longer tenure maturing on May 12, 2031.
The debentures are secured by a first pari-passu charge on Bajaj Finance's book debts and loan receivables, with a minimum security cover of 1.00 times the outstanding value.
Why now? The dual-tranche structure — spanning roughly three and five years — suggests Bajaj Finance is laddering its debt maturities to manage refinancing risk while locking in rates across different time horizons. Private placements of NCDs are a common tool for Indian non-banking financial companies (NBFCs) to fund their loan books without diluting equity.
What could go wrong? NCDs carry credit risk tied to the issuer's financial health. Any deterioration in Bajaj Finance's asset quality or a sharp rise in non-performing loans could pressure its ability to service these obligations. Rising interest rates could also make the fixed coupons less attractive to holders in the secondary market.
The signal: Large NBFCs continue to tap debt capital markets aggressively to fuel lending growth. Bajaj Finance's ability to raise nearly US$393.8M in a single private placement reflects strong institutional appetite for high-grade corporate debt in India. The spread between the two tranches — just 23 basis points for an additional two years of tenure — hints at a relatively flat yield curve expectation among investors, suggesting confidence in the company's long-term credit profile.
Read more: investywise.com
