In a strategic move, Bajaj Finance Ltd., India's leading non-bank lender, has inked a binding term sheet with Pennant Technologies Pvt. Ltd., solidifying plans to acquire a substantial 26% stake in the tech product company. This exchange was publicly disclosed via an official filing.
In a strategic move, Bajaj Finance Ltd., India's leading
non-bank lender, has inked a binding term sheet with Pennant Technologies Pvt.
Ltd., solidifying plans to acquire a substantial 26% stake in the tech product
company. This exchange was publicly disclosed via an official filing.
The acquisition, worth a considerable Rs 267.5 crore,
will be exclusively funded through cash reserves. Bajaj Finance's stake purchase will encompass 5,71,268 Compulsorily Convertible Preference Shares
(CCPS), each with a face value of Rs 100, alongside 4,22,738 equity shares
sourced from Pennant Technologies' promoters and existing shareholders.
Compulsorily Convertible Preference Shares offer the
holder the flexibility to convert them into a fixed number of equity shares
after a specified date or triggering event. Bajaj Finance's rationale for this
investment revolves around fortifying its technology roadmap.
Founded in 2005, Pennant Technologies specializes in
delivering technology services and software products tailored to the banking
and financial services sector. Over the past three fiscal years, the company
has posted turnovers of Rs 40 crore, Rs 52 crore, and Rs 74 crore,
Pending the finalization of this acquisition, expected to conclude by December 30, 2023, Pennant Technologies will evolve into a related party of Bajaj Finance, subject to specific conditions outlined in the definitive agreements.
Meanwhile, Bajaj Finance is poised to reveal its
financial results for the September quarter, with expectations running high for
a robust 30% increase in net profit compared to the previous year. Their
quarterly business update showcases a noteworthy surge in Assets Under
Management, marking the most substantial growth in four years.
Last week, Bajaj Finance gave the green light to raise Rs
10,000 crore through a Qualified Institutional Placement (QIP) and a preferential
issue. An impressive Rs 8,800 crore will be amassed through the QIP, while the
remainder will be generated via a preferential issue featuring up to 15.5 lakh
convertible warrants, extending to promoter Bajaj Finserv.
Currently, Bajaj Finance shares have seen a 23% rise since the year's inception, hitting a 52-week high and solidifying their market position. This strategic stake acquisition positions them to stay at the forefront of the financial services industry's tech evolution.