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Bajaj Finance

From Wikipedia, the free encyclopedia

Not to be confused with Bajaj Finserv.
Bajaj Finance Limited
FormerlyBajaj Auto Finance Limited (1987–2010)
Company typePublic
BSE: 500034
NSE: BAJFINANCE
BSE SENSEX constituent
NSE NIFTY 50 constituent
ISININE296A01024
IndustryFinancial services
Founded25 March 1987; 37 years ago (1987-03-25)
FounderRahul Bajaj
Headquarters
Pune
,
India
Key people
ProductsLending, fixed deposits, mutual funds
RevenueIncrease ₹54,982 crore (US$6.6 billion) (2024)
Increase ₹19,310 crore (US$2.3 billion) (2024)
Increase ₹14,451 crore (US$1.7 billion) (2024)
AUMIncrease ₹354,192 crore (US$42 billion) (2024)
Total assetsIncrease ₹375,742 crore (US$45 billion) (2024)
Total equityIncrease ₹76,695 crore (US$9.2 billion) (2024)
ParentBajaj Finserv (52.49%)
SubsidiariesBajaj 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]
Websitewww.bajajhousingfinance.in
Footnotes / references
Financials as of 31 March 2024.[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

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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

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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

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  • 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

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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

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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

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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

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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

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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

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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

[edit]
  1. ^ Adhikari, Anand (4 March 2022). "How Rajeev Jain is Transforming Bajaj Finance". Business Today (India). Archived from the original on 12 April 2022. Retrieved 30 April 2022.
  2. ^ "Bajaj Finance deposits cross Rs 50,000 crore". The Financial Express. 1 August 2023. Retrieved 30 June 2023.
  3. ^ "Bajaj Finance Ltd.: Ratings reaffirmed". ICRA Limited. 6 June 2023. Archived from the original on 30 August 2023. Retrieved 30 June 2023.
  4. ^ "Bajaj Finance Ltd Revised" (PDF). CAREEdge. 5 January 2023. Retrieved 30 June 2023.
  5. ^ "Bajaj Finance FY24 Q4 Results" (PDF).
  6. ^ "World Bank's IFC to make debt investment of $150 mn in Bajaj Finance". VCCircle. 21 April 2021. Archived from the original on 26 October 2021. Retrieved 17 March 2022.
  7. ^ Mahali, Monica; Bandopadhyay, Kalpataru (10 March 2022). "Evidence-Based Management: Case of Bajaj Finance Limited". The Management Accountant. 57 (4). Rochester, NY: 47–51. doi:10.33516/maj.v57i4.47-51p. S2CID 251269765. SSRN 4083601.
  8. ^ www.ETBFSI.com. "Bajaj Finance AUM jumps 31% as aggressive customer acquisition pays - ET BFSI". ETBFSI.com. Retrieved 26 September 2024.
  9. ^ Varier, Aarthira (3 June 2024). "Bajaj Finance's AUM rises 31% in Q1FY25, new loans booking improves by 10%". Business Standard. Retrieved 26 September 2024.
  10. ^ "RBI places 15 NBFCs in the upper layer under scale-based regulations". BusinessLine. 14 September 2023. Archived from the original on 2 October 2023. Retrieved 1 October 2023.
  11. ^ Dayal, Yogesh (14 September 2023). "RBI releases list of NBFCs in the Upper Layer (NBFC-UL) under Scale Based Regulation for NBFCs". Reserve Bank of India. Archived from the original on 1 October 2023. Retrieved 1 October 2023.
  12. ^ Sitaraman, Krishnan; Velonie, Ajit; Bhargav, Krishna (13 July 2021). "CRISIL - Rating Rationale, Bajaj Finance Limited" (PDF). CRISIL. Archived (PDF) from the original on 18 June 2022. Retrieved 17 March 2022.
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  17. ^ Piramal, Gita (21 March 2022). Rahul Bajaj: An Extraordinary Life. Penguin Random House India Private Limited. ISBN 978-93-5492-493-4. Archived from the original on 14 July 2023. Retrieved 4 August 2022.
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  20. ^ Phadke, Sanjay (31 March 2020). FinTech Future: The Digital DNA of Finance. SAGE Publishing India. ISBN 978-93-5388-249-5. Archived from the original on 2 October 2023. Retrieved 27 September 2023.
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  22. ^ a b Srivats, K. R. (12 April 2023). "Bajaj Finance plans entry into microfinance segment by 2025, says Sanjiv Bajaj". www.thehindubusinessline.com. Archived from the original on 1 May 2023. Retrieved 1 May 2023.
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  28. ^ Bijapurkar, Rama (29 February 2024). Lilliput Land: How Small is Driving India's Mega Consumption Story. Penguin Random House India Private Limited. ISBN 978-93-5708-379-9.
  29. ^ Babel, Rajeev (15 March 2021). Handbook of Non-Banking Financial Companies. Bloomsbury Publishing. ISBN 978-93-90176-20-5. Archived from the original on 12 May 2024. Retrieved 17 June 2024.
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  33. ^ Velonie, Ajit; Bhotika, Malvika; Sarvaiya, Foram (18 October 2023). "Rating Rationale: Bajaj Financial Securities Limited". CRISIL. Retrieved 17 June 2024.
  34. ^ P, Joseph Antony; Al, Et (4 June 2021). "Study of Comparative Performance of Non-Performing Assets among Selected Leading Non-Banking Financial Companies of India". Turkish Journal of Computer and Mathematics Education (TURCOMAT). 12 (13): 1077–1085. ISSN 1309-4653. Archived from the original on 27 May 2023. Retrieved 27 May 2023 – via SCOPUS.
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  36. ^ Ali, Shahnawaz (21 July 2023). "Impact of Firm Performance on Stock Returns: A Study of 30 Listed Firms in Bombay Stock Exchange". European Economic Letters. 13 (3): 1253. doi:10.52783/eel.v13i3.422. ISSN 2323-5233. Archived from the original on 2 October 2023. Retrieved 1 October 2023.
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  39. ^ "MobiKwik partners Bajaj Finance for larger financial services pie". www.thehindubusinessline.com. 3 August 2017. Archived from the original on 1 August 2022. Retrieved 1 August 2022.
  40. ^ "Bajaj Finance to acquire 12.6% in Mobikwik". The Economic Times. Archived from the original on 1 August 2022. Retrieved 1 August 2022.
  41. ^ Bose, Indranil; Kashyap, Nishant (2019). "Mobikwik's Full Service FinTech Platform Bet: Will it be a Winner?". DSpace @ Indian Institute of Management Calcutta. Archived from the original on 27 May 2023. Retrieved 27 May 2023.
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  43. ^ "Bajaj Finance to acquire up to 40% stake in Snapwork Technologies for up to ₹93 crore". www.thehindubusinessline.com. 26 November 2022. Archived from the original on 31 December 2022. Retrieved 31 December 2022.
  44. ^ Dayal, Yogesh (30 September 2022). "RBI releases list of NBFCs in the Upper Layer under Scale Based Regulation for NBFCs" (PDF). Reserve Bank of India. Archived (PDF) from the original on 9 October 2022. Retrieved 9 October 2022.
  45. ^ "RBI lists 16 NBFCs in upper layer, includes Tata Sons". Financialexpress. October 2022. Archived from the original on 9 October 2022. Retrieved 9 October 2022.
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  47. ^ Kayastha, Anshika (15 November 2023). "RBI orders Bajaj Finance to stop lending via eCOM, Insta EMI Card". BusinessLine. Archived from the original on 19 November 2023. Retrieved 19 November 2023.
  48. ^ Sampath, Vineetha (4 January 2024). "Bajaj Finance set for a sturdy quarter despite RBI directive". mint. Archived from the original on 18 January 2024. Retrieved 18 January 2024.
  49. ^ "Bajaj Finance stock recoups early losses post RBI ban; analysts see limited impact but eye quick resolution". Moneycontrol. 16 November 2023. Archived from the original on 18 January 2024. Retrieved 18 January 2024.
  50. ^ Varier, Aathira (2 May 2024). "RBI lifts curb on Bajaj Finance's lending products 'eCOM', 'Insta EMI Card'". Business Standard. Archived from the original on 13 May 2024. Retrieved 13 May 2024.
  51. ^ "India's Bajaj Finance says cenbank lifts ban on lending products". Reuters. 2 May 2024. Retrieved 13 May 2024.
  52. ^ "Bajaj Group unveils 'Bajaj Beyond' initiative; commits ₹5,000 crore for social impact programmes". BusinessLine. 22 March 2024. Archived from the original on 13 May 2024. Retrieved 13 May 2024.
  53. ^ Matta, Anubhuti. "Bajaj Group Unveils Bajaj Beyond, A CSR Initiative Committing Rs 5,000 Crore To Skilling India's Youth". Forbes India. Retrieved 13 May 2024.
  54. ^ Mansour, Nadia; Vadell, Lorenzo M. Bujosa (18 February 2022). Finance, Law, and the Crisis of COVID-19: An Interdisciplinary Perspective. Springer Nature. p. 27. ISBN 978-3-030-89416-0.{{cite book}}: CS1 maint: date and year (link)

Further reading

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