Bajaj Finance said on Thursday it will raise up to Rs 100 billion ($1.20 billion) by issuing shares to institutional investors and warrants to its largest shareholder.

The plan comes as demand for loans surges and competition heats up in the sector with the entry of Jio Financial Services, carved out of billionaire Mukesh Ambani’s Reliance Industries.

Companies such as Tata Capital and Aditya Birla Capital are also rushing to raise fresh funds.

Bajaj Finance will raise up to Rs 88 billion through a qualified institutional placement of shares, and another Rs 12 billion by issuing warrants convertible into shares to top shareholder Bajaj Finserv.

Bajaj Finserv’s stake in the company could increase from 52.45 per cent to 52.57 per cent after the issue, Bajaj Finance said, adding that the issue price would be determined at a later stage.

Bajaj Finance had last raised funds through a qualified institutional placement in 2019, raking in Rs 85 billion.

The lender said on Wednesday that new loans booked during the second quarter grew 26 per cent, while its assets under management increased about 33 per cent to about Rs 2.90 trillion as of September-end.

Asirvad Micro Fin IPO

Asirvad Micro Finance, a subsidiary of Manappuram Finance, on Thursday filed preliminary papers with Sebi to garner Rs 1,500 crore through an initial public offering (IPO).

The maiden public issue is purely a fresh issue of equity shares with no offer-for-sale component, according to the draft red herring prospectus.