Bajaj Finance Ltd. – Key Insights

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For many Indians, the world of finance and investments has a significant name in the form of Bajaj Finance Ltd. This giant of the non-banking financial sector has not only set high standards but has also played a key role in shaping the financial ethos of the nation. In this article, you will learn about the journey of Bajaj Finance Ltd., its inception, meteoric rise, diversifications, and commitment to redefining India’s financial industry. 

About Bajaj Finance Ltd.

AttributeDetails
FounderRahul Bajaj
Industry TypeNon-Banking Financial Company (NBFC)
Year Founded1987
HeadquartersPune, Maharashtra, India
Key PeopleSanjiv Bajaj (Chairman & MD)
Parent CompanyBajaj Finserv
Countries Present InPrimarily India
Market Capitalisation₹4.52 trillion
Total Number of Employees43,147
Locations3,733
Distribution Points 154,650+

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Overview of Bajaj Finance Ltd.

Beginning its journey in 1987, Bajaj Finance Ltd. quickly climbed the ranks to emerge as a leading figure in India’s non-banking financial segment. Beyond just numbers and balance sheets, their consistent dedication to customer-focused innovation shines brightly. Their diverse range of financial products ranges from personal loans, asset management, to wealth advisory. Their strategies are rooted in a deep understanding of the Indian market trends, enabling them to introduce innovative financial solutions that appeal to both urban and rural customers.

Bajaj Finance Ltd. Historical Timeline

1987: Bajaj Finance Ltd. was founded.

1990s: Starting as a two-wheeler finance company in 1987, Bajaj Finance realised early that consumers value time and are willing to pay a premium for faster financing options. Capitalising on this insight and rising consumerism, the company diversified into Durable Finance in the late 1990s, becoming a key player in India’s booming electronics market.

2000s: Bajaj Finance expanded its services, embraced technology, and formed strategic partnerships. By 2006, its disbursements reached ₹1,000 crore, and by 2008, its Assets and Shareholders’ Funds surpassed ₹1,000 crore figure. Reflecting its broader scope, the company rebranded as Bajaj Finance Limited in 2010.

2011-2013: Bajaj Finance revolutionised the market with the EMI Card and Flexisaver, optimising approval times from 15 minutes to 5 seconds. By 2014, their assets neared ₹20,000 crore. Emphasising governance and safety, they achieved top ratings from CRISIL and ICRA.

2014-2015: The company marked a 45% growth in customer acquisition, acquiring 4.92 million customers. Rural business and digital product financing expanded remarkably, alongside introducing loans for doctors using advanced analytical tools. BFL introduced advanced wealth management channels in collaboration with Bajaj Allianz and HDFC Life.

2015-2016: Bajaj Finance reported a 36% growth in customer acquisition, introducing urban gold loans and strengthening its EMI card business, focusing on diversifying and de-risking business ventures.

2016-2017: An impressive quarter was recorded with 2.5 million loans. Innovations like life care finance were introduced, collaborating with over 2,500 healthcare establishments across top-tier cities.

2017-2018: A commendable year with Bajaj Finance’s AUM crossing ₹75,000 crore. Significant movements were the ₹4,500 crore raising via Qualified Institutional Placement and a strategic 11% stake acquisition in Mobikwik. Digital innovations led to the inception of Bajaj Finserv Direct Limited, enhancing the digital customer experience.

2018-2019: Bajaj Finance Limited earned a ‘BBB’ long-term and ‘A-3’ short-term credit rating from S&P Global Ratings, equivalent to India’s sovereign rating. 

2019-2020: The year experienced noteworthy achievements despite ending with a pandemic outbreak. Assets Under Management (AUM) ascended by 27% YOY, reaching Rs. 1,47,153 crore by 31st March 2020. The company’s reach expanded to 2,392 locations in India, with a customer base surpassing 40 million. Bajaj Broking was also initiated, aiming to expand the Loan Against Securities (LAS) business.

2021-2022: Crossed the significant milestone of 40,000 employees, asserting its stature as one of India’s largest Non-Banking Financial Companies in terms of its workforce.

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Major Subsidiaries of Bajaj Finance Ltd.

  • Bajaj Financial Services Ltd: A powerhouse in its own right, Bajaj Financial Services Ltd. is known for its diversified financial services. In addition to traditional services, the entity has made significant advancements in fields such as wealth management and insurance brokerage, providing comprehensive financial solutions.
  • Bajaj Housing Finance Ltd: Recognised as a driving force in India’s housing sector, it holds prominence with its extensive range of home loans and refinancing solutions. Prioritising transparency and client contentment, it serves an array of clients.
  • Bajaj Allianz Life Insurance: In a strategic partnership with the global powerhouse, Allianz SE, it presents a suite of life insurance solutions, specifically designed to cater to the needs of Indian customers.
  • Bajaj Allianz General Insurance: Furthering the alliance with Allianz SE, this subsidiary offers a wide range of non-life insurance products, ranging from health to vehicle insurance.

Major Acquisitions by Bajaj Finance Ltd.

  • Snapwork Technologies (2022): Situated in Mumbai, Snapwork Technologies is a renowned technology firm that specialises in offering digital lending solutions to a wide customer base. Bajaj Finance Ltd. recognised the potential and strategic fit of Snapwork’s expertise and acquired up to 40 per cent stake. This significant acquisition was executed at a valuation of ₹93 crore (equivalent to US$12 million).
  • Mobikwik (2018): Mobikwik is a prominent mobile wallet service in India boasting an impressive user base exceeding 100 million. Seeing the exponential growth in digital wallet services and the vast reach of Mobikwik, Bajaj Finance Ltd. took a strategic step by purchasing a 10.83% stake in the company. The deal was struck for ₹225 crore, which translates to about US$30 million.

Products of Bajaj Finance Ltd.

  • Flexi Loans: Reflecting the essence of financial adaptability, Bajaj’s Flexi Loans are designed keeping in mind the diverse and dynamic borrowing needs of Indians. By offering borrowers the freedom to draw funds as per their necessity and paying interest only on the utilised amount, it has revolutionised the loan landscape.
  • Digital EMI Network Card: A perfect blend of technology and finance, this product  offers smooth conversions of purchases into easily manageable instalments. With partnerships spanning over a million outlets across India, its widespread presence is undeniable.
  • Fixed Deposits: At a time when financial security is of utmost importance, Bajaj’s Fixed Deposits emerge as a pillar of reliability. Their competitive interest rates coupled with unmatched trustworthiness make them a top choice for investors.
  • Lifestyle Finance: Reflecting Bajaj’s understanding of India’s evolving aspirations, this product range addresses a variety of lifestyle needs. Be it a dream vacation, a grand wedding, or unexpected medical emergencies, Lifestyle Finance ensures that you remain financially secure.

Bajaj Finance Ltd. Shares

The stock of the company has undergone a split thrice between Nov 2006 and Sep 2016. Furthermore, the company has consistently paid dividends to its investors. This, combined with the robust financial performance, stable management, and positive investor opinion of the company, consistently keep Bajaj Finance shares high in demand. The company figures as one of the most-desired blue chip stocks in India. In 2023, the company had an earnings-per-share (EPC) payout ratio of 57% with a dividend yield of 0.42%. 

Conclusion

Bajaj Finance Ltd.’s remarkable journey, marked by innovation and customer-centricity, showcases its commitment to driving financial inclusivity in India. Through its offerings, strategic expansions, and unwavering vision, it has continually shaped the finance sector. To think of Bajaj Finance Ltd. solely as a financial institution would be oversimplifying its significance. The outlook for the future shines promisingly, indicating continued growth and lasting impact.

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