Bajaj Finserv Ltd: Diversified Financial Services

Bajaj Finserv Limited (BFS) is an Indian non banking financial services company headquartered in the city of Pune, India. 

Moreover, Bajaj Finserv is the Holding Company for various Financial Services under the Bajaj Group. Further, the Company provides Financing for asset acquisition, General Insurance, Life and Helath Insurance, Retirement and Saving Solutions.

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(A) Bajaj Finserv Group Companies

Bajaj Finserv Group Companies

Bajaj Finserv was part of Bajaj Auto Ltd till 2007. Thus, Bajaj Finserv was formed in the Year 2007. However, It completely demerged from Bajaj Auto Ltd in Feb-2008.

  • Bajaj Finance Ltd is a deposit taking Non-Banking Financial Company (NBFC) registered with the RBI. It is a subsidiary of Bajaj Finserv Ltd and is engaged in the business of lending and acceptance of deposits.
  • Bajaj Finserv Direct Ltd – the Whole Owned Subsidiary of Bajaj Finserv, aims at creating a digital market place for all the Financial Products, like Loans, Investments, Insurance etc.
  • Bajaj Finserv Health Ltd is the digital healthcare venture of the Company. In Sep-20 it launched “Aarogya care”, a mobile healthcare application.
  • Bajaj Allianz General Insurance Limited & Bajaj Allianz Life Insurance Limited are into the Business of Insurance.
  • Further, BFS has interest in renewable energy in the form of 138 windmills situated in Maharashtra, with an aggregate installed capacity of 65.2 MW

(B) Bajaj Group Family Structure

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(C) Shareholding Pattern

Bajaj Finserv shareholdings pattern
Bajaj Finserv holdings more than 1%

Bajaj Finserv – Mutual Funds Holding

Bajaj Finserv mutual fund holdings

Mutual Funds Holdings in Bajaj Finserv Ltd was 3.06% as on 31-Dec-20, it reduced to 2.96% as on 30-Jun-21 and subsequently it has increased to 3.65% as on 31-Dec-21.

(D) Executive Management

Mr Sanjiv Bajaj – Chairman & Mg Director

Mr Sanjiv Bajaj is the Chairman and Mg Director of Bajaj Finserv Ltd.

Further, Mr Sanjiv Bajaj has done B.E (Mech) from the University of Pune, MSc (Manufacturing Systems engg) from the University of Warwick, UK and MBA from Harvard Business School, USA.

He is the Mg Director of the Company since Feb-2008. His role is to guide current business and build new ones in the Financial Sevices space. Further, He is responsible for the business on consolidated level across its businesses. He is also the Vise Chairman of Bajaj Finance Ltd since Oct-2013. Further, he is also the Mg Director & CEO of Bajaj Holdings & Investments Ltd since April-2012.

In FY21 Mr Sanjiv received Remuneration of Rs 60.01, being 0.10% of the Net Sales and 0.81% of the Net Profit.

(E) Business

Bajaj Finserv (BFS) participates in the financing business through Bajaj Finance Ltd. (BFL). BFL has a 100% subsidiary – Bajaj Housing Finance Ltd. (BHFL).

The protection and savings business is done through (i) Bajaj Allianz General Insurance Company Ltd. (BAGIC) for general insurance including health insurance; and (ii) Bajaj Allianz Life Insurance Company Ltd. (BALIC) for life insurance, savings and retirement plans.

Both BAGIC and BALIC are unlisted joint ventures with Allianz SE, one of the world’s leading composite insurers.

As on 31 March 2021, Bajaj Finserv held 74% of the equity capital in both BAGIC and BALIC, with the balance being held by Allianz.

(F) Branch Network

Bajaj Finserv Ltd operates over 2,200 branches across the country. As on 31-Mar-21 the total Geographical Footprint stood at 2,988 locations and 1,10,300+ Distribution Points all over India.

Bajaj Finserv Ltd’s rural footprint was further strengthened in FY21 with the addition of 333 locations taking the total number of locations to 1,690.

(G) Revenue Segment

Bajaj Finserv revenue segment

(H) Financial Parameters

Bajaj Finserv financial parameters

The deposits book increased to Rs 25,803 crore in FY21, representing a growth of 20%. BFL’s deposit book now contributes to 26% of its standalone borrowings and 20% of its consolidated borrowings as on 31-Mar-21, compared 21% and 17%, respectively, as on 31-Mar-20.

(I) Segment Wise Revenue

(J) Management Discussion and Concall Highlights

  • During FY21, Bajaj Finserv Ltd made an application to the Securities and Exchange Board of India (SEBI) for grant of a licence to set up an asset management company to enter the mutual fund business.
  • Number of new loans booked by Bajaj Finance Ltd in FY21 was 16.88 million

Concall Highlights Q3FY22

For Q3 FY22 AUM growth at 26.3% YoY to Rs 1,81,250 crore, coupled with steady margins and lower provision led to 85% YoY growth in earnings to 2,125 crore. Further, the 2-wheeler business muted while CV witnessed signs of improvement. Retail health was slower due to base effect led by sales of Corona Kavach.

Heavy rainfall in Uttarakhand & Tamil Nadu had a negative impact. Thus, claim ratio increased to 69.6% in Q3FY22 (for Insurance Segments)

Quarterly Performance of Bajaj Finserv Ltd

i) Q-o-Q Performance

ii) Y-o-Y Performance

iii) 9 Months YoY Performance

(L) Strengths

i) Parent to Bajaj Finance Ltd

Bajaj Finserv Ltd (BFS) is the Parent Company of Bajaj Finance Ltd (BFL), holding 52.65% shares in BFL as on 31-Dec-21. BFL is strategic important subsidiary of BFS. Bajaj Finance has emerged as one of the largest retail asset financing NBFCs in India, and continues with its two-pronged strategy of building scale and maximising profit. Segments such as mortgages, small business loans, and commercial lending are focused on building scale, while consumer durable loans, personal loans, and 2- and 3-wheeler financing are focused on maximising profit. 

ii) Well-Diversified Products

BFS through its subsidiaries provides vast variety of Financial Products. For instance, Financing for asset acquisition, General Insurance, Life and Helath Insurance, Retirement and Saving Solutions.

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References:  Annual Reports, News Publications, Investor Presentations, Corporate Announcements, Management Discussions, Analyst Meets & Management Interviews, Industry’s Publications.

Disclaimer: The report only represents personal opinions and views of the author. No part of the report should be considered as recommendation for buying/selling any stock. Thus, the report & references mentioned are only for the information of the readers about the industry stated.

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