Bajaj Housing

The Company has a distinguished heritage of the "Bajaj" brand, which enjoys widespread recognition as a reliable retail brand with strong brand equity.

The Company is the second largest HFC in India (in terms of AUM) with a track record of strong growth driven by a diversified portfolio.

The Company has a strategic presence with omni-channel sourcing strategy, driven by customer-focused digitization initiatives and technology.

The COmpany has well defined credit evaluation and risk management practices resulting in lowest GNPA and NNPA among its Peers in Fiscal 2024.

The Company has access to diversified and cost-effective borrowing sources facilitated by the highest possible credit ratings from rating agencies.

The Company has an experienced management team supported by a team of dedicated professionals and ability to attract and retain talented employees.

Its inability to fully recover the collateral value or the sums due from defaulted loans promptly or entirely, could adversely affect its business, results of operations, cash flows and financial condition.

If the company is unable to control the level of Gross Non-Performing Assets/Stage 3 Assets in its portfolio effectively or if the company is unable to maintain adequate provisioning coverage or if there is any change in regulatorily-mandated provisioning requirements, its financial condition and results of operations could be adversely affected.

If the company is unable to comply with the requirements stipulated by Reserve Bank of India, it could have a material adverse effect on its business, results of operations, cash flows and financial condition.

Its assets under management are concentrated in four states and the union territory of New Delhi and any adverse developments in these regions could have an adverse effect on its business, results of operations, cash flows and financial condition.

The company has allotted Equity Shares to Bajaj Finance Limited, one of its Promoters, in Fiscal 2023 at a price that will be lower than the Offer Price.

Its inability to comply with the financial and other covenants under its debt financing arrangements could adversely affect the company`s business, results of operations and financial condition.

Its portfolio is significantly exposed to real estate and any significant downturn or any adverse developments in the real estate sector may lead to an increase in impairment losses and adversely affect its business, results of operations, cash flows and financial condition. Further, its may not be able to identify or correct defects or irregularities in title to the properties which are made collateral to the loans offered by it to its customers or realize the loan amount from such properties which may adversely affect its business.

Its may be impacted by macroeconomic factors, including volatility in interest rates, which could cause its Net Interest Income, Net Interest Margins and the value of its fixed income portfolio to decline and adversely affect its profitability, business, results of operations, cash flows and financial condition, including in the near-term.

The Company has availed borrowings from a number of related parties and there can be no assurance that its could not have achieved more favourable terms if such transactions had not been entered into with such related parties.

The company is party to certain legal proceedings and any adverse outcome in these or other proceedings may adversely affect its business.

Certain of its Promoter Group entities, Group Companies and Directors are engaged in businesses similar to its and this may result in conflict of interest with the company.

Its may faces interest rate and maturity mismatches between its assets and liabilities in the future, including in the near term, which may cause liquidity concerns. Further, if the company is unable to secure funding on acceptable terms and at competitive rates when needed, it could have a material adverse effect on its business, results of operations, cash flows and financial condition.

The company depends on an external distribution network for referrals of a certain portion of its customers and this external distribution network does not work exclusively for it.

The company relies on the accuracy and completeness of information about customers and counterparties. Any misrepresentation, errors or incompleteness of such information could adversely affect its business, results of operations, cash flows and financial condition.

Its debt securities are listed on Bombay Stock Exchange, and the company is subject to strict regulatory requirements with respect to such listed debt securities. Its inability to comply with or any delay in compliance with such laws and regulations may have an adverse effect on its business, results of operations, cash flows and financial condition.

A majority of its retail home loan portfolio may be adversely affected by various factors such as business failure, insolvency, lack of liquidity, loss of employment or personal emergencies of its customers. These factors could lead to increased customer defaults, leading to an increase in the levels of its non-performing assets and possible fall in the rate of loan portfolio expansion.

The company is subject to periodic inspections by the National Housing Bank. Non-compliance with observations made during any such inspections could result in penalties and fines, and could adversely affect its reputation, business, financial condition, results of operations and cash flows.

Its funding requirements and deployment of the Net Proceeds of the Offer are based on management estimates and have not been independently appraised. Any variation in the utilisation of the Net Proceeds would be subject to certain compliance requirements, including prior Shareholders` approval.

The company is exposed to risks related to concentration of loans to certain customers. As at June 30, 2024, loans to its top 10 and 20 largest customers amounted to 6.2% and 8.8% of its total outstanding loans.

Its insurance coverage may not be sufficient or may not adequately protect it against losses, and successful claims that exceed its insurance coverage could harm the company`s business, results of operations, cash flows and financial condition.

The company conduct its operations under the "Bajaj Finserv" brand and have a license to use that brand name and certain other trademarks. If the company fails to successfully enforce its intellectual property rights or are unable to renew its intellectual property licence agreements, the companay`s business, results of operations, cash flows and financial condition could be adversely affected.

The company outsource certain operational activities to third-party service providers. Any lapse by such third party service providers may have adverse consequences on its business and reputation.

The company, its Promoter, Group Companies and certain members of its Promoter Group may have to comply with stricter regulations and guidelines issued by regulatory authorities in India, including the Reserve Bank of India, National Housing Bank, Securities and Exchange Board of India and Insurance Regulatory and Development Authority of India, which may increase its compliance costs, and subject us to penalties or business restrictions.

The company is exposed to risks of increased commercial real estate vacancies in its lease rental discounting portfolio and regulatory and other challenges faced by developers in relation to its developer financing portfolio.

The company is exposed to risks that may arise if its customers opt for balance transfers to other banks or financial institutions, or if customers face increased difficulties in refinancing their existing home loans from other banks and financial institutions to the Company.

Its business is subject to various operational risks associated with the financial industry, including fraud.

The company is subject to the risk of failures of, or a material weakness in, its internal control systems, which could have a material adverse effect on its reputation, business, results of operations, cash flows and financial condition.

Any downgrade in its credit ratings or significant increase in gross non-performing assets may lead to an increase in its cost of funds for existing and future borrowings.

Its Statutory Auditors have included a matter of emphasis in their audit report on financial statements as at and for the fiscal year ended March 31, 2022.

Its regulatory mandated ratios may differ from the company peers and if the company fails to comply with the regulatory requirements, it could severely impact its business, results of operations, cash flows and financial condition.

The company is dependent on its Key Managerial Personnel and Senior Management Personnel, and the loss of, or its inability to attract or retain such persons could adversely affect its business, results of operations, cash flows and financial condition.

Negative publicity could damage its reputation and adversely impact the company`s business and financial results.

Any non-compliance with mandatory anti-money laundering, combating-terrorism financing and know your customer laws could expose it to liability and harm its reputation.

There can be no assurance that its growth and financial performance will continue or will sustain at a similar rate or that the company will be able to manage its rapid growth and maintain operational efficiencies.

Its investments are subject to market and credit risk. Any decline in value of these investments may have an adverse effect on its business, results of operations, cash flows and financial condition.

Weaknesses, disruptions, failures or infiltrations of its information technology systems could adversely impact the company`s business and results of operations.

Increasing regulatory focus on personal information protection could adversely affect its business and expose it to increased liability.

If the company fails to identify, monitor and manage risks and effectively implement its risk management policies, it could have a material adverse effect on its business, financial condition, results of operations and cash flows.

Its may experience difficulties in expanding the company`s business or pursuing business opportunities in new regions and markets.

The company may not be able to obtain, renew or maintain statutory and regulatory permits and approvals required to operate its business, which may materially and adversely affect the company`s business, results of operations, cash flows and financial condition.

The company has entered into a number of related party transactions and there can be no assurance that its could not have achieved more favourable terms if such transactions had not been entered into with related parties.

The company has contingent liabilities and its business, results of operations, cash flows and financial condition may be adversely affected if these contingent liabilities materialize.

Industry information included in this Red Herring Prospectus has been derived from an industry report commissioned by us and paid for by it for such purpose.

The company has in this document included certain non-GAAP financial measures and certain other selected statistical information related to its operations and financial condition. These non-GAAP measures and statistical information may vary from any standard methodology that is applicable across the financial services industry and therefore may not be comparable with financial or statistical information of similar nomenclature computed and presented by other financial services companies.

The bank ruptcy code in India may affect its rights to recover loans from its customers.

The company does not own all its branch offices. Any termination or failures by the company to renew the lease agreements in a favourable and timely manner, or at all, could adversely affect its business, results of operations, cash flows and financial condition. Moreover, many of the lease agreements entered into by it may not be duly registered or adequately stamped.

Its ability to pay dividends in the future will depends on the company earnings, financial condition, working capital requirements, capital expenditures, restrictive covenants of its financing arrangements and compliance with applicable laws.

Significant or adverse changes by the Government, Reserve Bank of India or National Housing Bank in their policy initiatives facilitating the provision of housing and housing finance or any change in the tax incentives that the Government currently provides to housing finance companies may have an adverse effect on its business, results of operations and financial condition.

A portion of the proceeds from this Offer will not be available to the company.