Bajaj Finance Ltd. moves to reshape its capital structure

The 8.07% coupon is 67 bps above Bajaj Finance’s latest reported blended cost of funds of 7.40%. Using the issuance terms in your question, this points to a higher marginal borrowing cost than the existing average funding book, but it does not by itself establish a structural change in the trend.

• Bajaj Finance reported Q1 FY27 cost of funds at 7.40%, a 1 bp sequential improvement from Q4 FY26. ^[1]
• The 8.07% NCD coupon therefore exceeds that reported average by 0.67 percentage points, or 67 bps. This is a derived comparison from the two rates.
• Management nevertheless indicated a slight upward bias in cost of funds and expected FY27 margin moderation of 10–15 bps. ^[2]

Trend read: The issuance is consistent with emerging upward pressure on incremental funding costs, but the evidence is mixed rather than a clean inflection. Recent secured NCD placements were priced at 7.79% in August, ^[3] 7.92% in June, ^[4] 7.93% and 8.00% across two June maturities, ^[5] and 8.15% for a 10-year issue in August. ^[6] The 8.07% rate sits above several shorter or intermediate-tenor issues but below the 8.15% 10-year placement.

The key comparability caveat is that WACF is a blended, backward-looking cost across the full borrowing mix, whereas an NCD coupon is a transaction-specific marginal rate affected by tenor, security, investor demand, liquidity and issuance timing. Accordingly, the best conclusion is: incremental borrowing costs appear higher than the current blended average and management already sees upward pressure, but one 8.07% issuance is not sufficient to prove a sustained WACF uptrend.

The Rs 2,050 crore NCDs have a 1,294-day tenor—approximately 3.5 years—with allotment on 8 September 2026 and maturity on 25 March 2030. They carry an 8.07% annual coupon, payable on 25 March each year, with redemption at maturity. ^{[7] [8]}

ALM interpretation: this is a medium-term, bullet-maturity liability. It would fit an ALM strategy that funds a portion of the lending book through term liabilities rather than relying only on short-term borrowings or continuous refinancing. The first-priority pari-passu security over loan receivables also links the instrument directly to the lending asset base. ^[8]

However, a definitive assessment against Bajaj Finance’s existing ALM strategy cannot be made from the cited material: the latest annual-report ALM maturity ladder, including asset and liability buckets, cumulative mismatches and liquidity buffers, is not included. Accordingly:

• What is evident: the NCD creates a funding obligation concentrated in the March 2030 maturity bucket, with annual interest servicing before then. ^[7]
• What would indicate alignment: the company’s loan receivables and other cash inflows should have sufficient maturity and liquidity coverage around that bucket, while the intervening ALM gaps remain within disclosed limits.
• Key risk: because principal is redeemable at maturity rather than amortised periodically, the issue creates a refinancing or liquidity requirement in March 2030. The alignment is therefore supportive only if the annual report’s ALM framework shows adequate medium-term asset matching and refinancing capacity.