Bajaj Finance

Not to be confused with Bajaj Finserv.

Bajaj Finance Limited

Formerly	Bajaj Auto Finance Limited (1987–2010)
Company type	Public
Traded as	BSE: 500034 NSE: BAJFINANCE BSE SENSEX constituent NSE NIFTY 50 constituent
ISIN	INE296A01024
Industry	Financial services
Founded	25 March 1987; 37 years ago (1987-03-25)
Founder	Rahul Bajaj
Headquarters	Pune , India
Key people	Sanjiv Bajaj Rajeev Jain[1]
Products	Lending, fixed deposits, mutual funds
Revenue	₹54,982 crore (US$6.6 billion) (2024)
Operating income	₹19,310 crore (US$2.3 billion) (2024)
Net income	₹14,451 crore (US$1.7 billion) (2024)
AUM	₹354,192 crore (US$42 billion) (2024)
Total assets	₹375,742 crore (US$45 billion) (2024)
Total equity	₹76,695 crore (US$9.2 billion) (2024)
Parent	Bajaj Finserv (52.49%)
Subsidiaries	Bajaj Financial Services Bajaj Housing Finance Bajaj Financial Securities
Rating	CRISIL AAA+/Stable Long-term debt[2] ICRA AAA+/Stable Non-convertible debenture[3] CARE AAA+/Stable Non-convertible debenture[4]
Website	www.bajajhousingfinance.in
Footnotes / references Financials as of 31 March 2024^[update].[5]

Bajaj Finance Limited (BFL) is a deposit-taking Indian non-banking financial company headquartered in Pune.^[6][7] It has a customer base of 88.11 million^[8] and holds assets under management worth ₹354,192 crore (US$42 billion), as of June 2024.^[9]

As per the 2023 list of NBFCs issued by the Reserve Bank of India, Bajaj Finance Limited holds the second position in the upper layer based on scale-based regulation guidelines.^[10][11]

History

Originally incorporated as Bajaj Auto Finance Limited on March 25, 1987, as a non-banking financial company, primarily focused on providing two and three-wheeler finance.^[12] After 11 years in the auto finance market, Bajaj Auto Finance Ltd launched its initial public issue of equity share and was listed on the Bombay Stock Exchange and National Stock Exchange of India.^[13] At the turn of the 20th century, the company ventured into the consumer durables finance sector and started offering small-size loans.^[14][15] In the subsequent years, Bajaj Auto Finance diversified into business and property loans as well.^[16][17]

In 2006, the company's assets under management hit the ₹1,000 crore (US$120 million). In 2010, the company's registered name changed from Bajaj Auto Finance Limited to Bajaj Finance Limited.^[18]

By 2015, BFL had set up a series of Disaster Recovery (DR) data centers for business continuity.^[19] Additionally, by 2020, it had started using data analytics and big data tools.^[20]

In January 2023, Bajaj Finance launched its loan against property (LAP) business for micro, small, and medium-sized enterprise (MSME) customers.^[21][22] By 2020, 60% of Bajaj Finance's workload was on cloud and originally, they aimed to create a super-app for existing customers, but due to COVID-19 pandemic in India, they expanded the plan to encompass various services by integrating five proprietary marketplaces within their ecosystem—EMI store, insurance, mutual funds, broking, and health.^[23]

Operations

As of March 2023, the company deals in consumer lending, SME (small and medium-sized enterprises) lending, commercial lending, rural lending, deposits, and wealth management.^[24] And, across 3800 towns,^[25] it has 294 consumer branches and 497 rural locations with over 33,000+ distribution points and 1,50,000+ stores.^[26]

As of June 2022, Bajaj Finance has been working with RBL Bank and DBS Bank to issue co-branded credit cards.^[27]

Most of Bajaj Finance's revenue is generated from suppliers who pay for access to their larger customer base.^[28]

Subsidiaries

• Bajaj Housing Finance, as a wholly owned subsidiary of Bajaj Finance, provides various housing finance products, including home loans, loans against property, and lease rental discounting, among others.^[29] In June 2024, it has filed its DRHP with Securities and Exchange Board of India for a ₹7,000 crore (US$840 million) initial public offering,^[30] including a ₹4,000 crore (US$480 million) crore fresh share sale^[31] and a ₹3,000 crore (US$360 million) offer-for-sale by parent company, Bajaj Finance.^[32]
• Bajaj Financial Securities, the brokerage division, handles stock market equities trading.^[33]

Financials

In the year 2021, an analysis using Spearman's rank correlation coefficient was conducted to examine the relationship between revenue factors and non-performing assets (NPA) parameters in Indian non-banking financial companies. Specifically, when studying Bajaj Finance, it was observed that there existed a statistically significant positive correlation between revenue and gross NPA (P<0.04), profit after tax (PAT) and gross NPA (P<0.04), as well as return on assets (ROA) and gross NPA (P<0.005), with a negative correlation found in the latter case.^[34][35]

In a study conducted in 2023, examining 30 companies listed on the Bombay Stock Exchange, which was subsequently published in the European Economic Letters journal, it was found that Bajaj Finance stock reached a maximum average return of 58.58%.^[36]

Funding and investments

The parent company, Bajaj Finserv Limited, holds 52.49% of the total shares and has a controlling stake in the subsidiary.^[22] Other major investors include Maharashtra Scooters Limited, the Monetary Authority of Singapore-Government of Singapore, Nomura Securities, BNP Paribas, Smallcap World Fund INC, and AXIS Long Term Equity Fund.^[37][38]

Investments

In 2017-18, Bajaj Finance acquired a 12.6 percent interest in the mobile wallet company MobiKwik.^{[39][40][41][42]}

In November 2022, Bajaj Finance announced its intention to acquire Mumbai-based SnapWork Technologies for ₹93 crore (US$11 million) through a combination of primary and secondary transactions. The acquisition was anticipated to be completed before 31 December 2022.^{[43][needs update]}

Regulatory

In September 2022, the Reserve Bank of India (RBI) included Bajaj Finance as one of the 16 NBFCs that are part of the NBFC-Upper Layer list. This means that the RBI has requested that the company must develop and implement a board-approved policy for the adoption of the more stringent regulatory framework that is applicable to it.^[44][45]

Compliance issues

In November 2023, RBI banned the company from approving or distributing loans through two of its lending services, namely 'eCOM' and 'Insta EMI Card'.^{[46][47][48][49]} In an exchange filing in May 2024, the company announced that the RBI had lifted the said restrictions following remedial actions taken by the company.^[50][51]

Philanthropy

Bajaj Finance is involved in "Bajaj Beyond," a collaborative CSR initiative with Bajaj Auto and Bajaj Electricals, committing ₹5,000 crore (US$600 million) crore to multiple social impact projects.^[52] The company collaborates with various institutions including the Jamnalal Bajaj Foundation, Jankidevi Bajaj Gram Vikas Sanstha, and the Kamalnayan Bajaj Hospital.^[53] Also, it is involved in various areas such as education, empowering women, providing skill-building training, healthcare, and other projects focused on socio-economic development.^[54]

References

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Further reading

• Kay, Chris (15 September 2024). "India's top shadow bank lists housing finance arm in blockbuster $782mn IPO". Financial Times. Retrieved 26 September 2024.
• Das, Saikat (13 August 2024). "India's Biggest Shadow Bank Bajaj Seeks Up to $500 Million Loan". Bloomberg News. Retrieved 28 August 2024.
• Sachan, Rohit Kumar; Kumari, Shabanam; Khandelwal, Vipul; Kumar, Tarun (8 April 2024). "Machine Learning Approach for Predicting the Net Asset Value (NAV) of Mutual Funds based on Portfolio Holdings". Procedia Computer Science. 233: 154–163. doi:10.1016/j.procs.2024.03.205. ISSN 1877-0509.
• Sharma, Prakhar (2024). Bajaj Finance Equity Research January 30, 2024, Jefferies Group
• Das, Narayandas; Tahilyani, Rachana (2022). "Bajaj Finance: Building an Omnipresent Financial Services Firm". Harvard Business School Case. 26 (2). Boston: Harvard Business School: 523–040.
• Shakeel, Ahmed Mir; Yatoo, Mohd Ashraf; Singh, Jagjeet (2021). "The Impact Of Covid 19 On Corporate Governance : A Case Study Of Bajaj Finance Ltd". Elementary Education Online. 20 (6). İlköğretim Online: 4443–4448.
• Sindhuja, P N; Muthukumar, R (2012). Better off in the Cloud - Case of Bajaj Finance Limited. Hyderabad: IBS Case Development Centre.
• Ramasamy, Sathishkumar; Balamurugan, G (2019). "Profitability Analysis of Lease Financing Company:A Study with Reference to Bajaj Finance Limited". JAC: A Journal of Composition Theory. 12 (11): 917–924. SSRN 3572491.