# Bajaj Finance

Bajaj Finance Limited (BFL) is a deposit-taking Indian non-banking financial company headquartered in Pune. It has a customer base of 88.11 million and holds assets under management worth ₹354,192 crore (US$41 billion), as of June 2024.
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.

## 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. 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. At the turn of the 20th century, the company ventured into the consumer durables finance sector and started offering small-size loans. In the subsequent years, Bajaj Auto Finance diversified into business and property loans as well.
In 2006, the company's assets under management hit the ₹1,000 crore (US$110 million). In 2010, the company's registered name changed from Bajaj Auto Finance Limited to Bajaj Finance Limited. In its first seven years, Bajaj Finance mainly borrowed wholesale and lent retail. Since 2014, it has also borrowed retail and lent wholesale, diversifying its liability profile.
By 2015, BFL had set up a series of Disaster Recovery (DR) data centers for business continuity. Additionally, by 2020, it had started using data analytics and big data tools.
In January 2023, Bajaj Finance launched its loan against property (LAP) business for micro, small, and medium-sized enterprise (MSME) customers. 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.
As of September 30, 2024, money markets made up 47% of company's borrowings, bank borrowings 29%, deposits 20%, and external commercial borrowings 4%. Deposits grew 21% YoY to ₹66,131 crore (US$7.6 billion).

## 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. And, across 3800 towns, it has 294 consumer branches and 497 rural locations with over 33,000+ distribution points and 1,50,000+ stores.
Most of Bajaj Finance's revenue is generated from suppliers who pay for access to their larger customer base. As of December 2024, mortgages currently make up 31% of its consolidated AUM, while SME lending accounts for 14% and commercial lending for 13%.
In the past, Bajaj Finance had been working with RBL Bank and DBS Bank to issue co-branded credit cards. But, in early December 2024, the company ended its partnerships due to new Reserve Bank of India rules restricting the role of non-banking partners in such agreements.

## 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. In June 2024, it has filed its DRHP with Securities and Exchange Board of India for a ₹7,000 crore (US$800 million) initial public offering, including a ₹4,000 crore (US$460 million) crore fresh share sale and a ₹3,000 crore (US$340 million) offer-for-sale by parent company, Bajaj Finance.
* Bajaj Financial Securities, the brokerage division, handles stock market equities trading.

## 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.
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%.

## Funding and investments

The parent company, Bajaj Finserv Limited, holds 52.49% of the total shares and has a controlling stake in the subsidiary. 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.

### Investments

In 2017-18, Bajaj Finance acquired a 12.6 percent interest in the mobile wallet company MobiKwik.
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 completed by 31 December 2022.
In October 2023, the company acquired 26% stake in Hyderabad-based Pennant Technologies for ₹267.50 crore (US$31 million).

### Climate finance

In November 2024, the company partnered with the International Finance Corporation, has secured $400 million as part of a $1 billion fundraising initiative to expand access to climate finance in India. This funding is aimed at promoting the adoption of electric vehicles (EVs) across two-, three-, and four-wheelers, supporting energy-efficient consumer goods (EECG), and increasing financial inclusion for women-owned microenterprises and women micro-borrowers.

## Regulatory

In September 2022, the 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.

### 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'. 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.

## Philanthropy

Bajaj Finance is involved in "Bajaj Beyond," a collaborative CSR initiative with Bajaj Auto and Bajaj Electricals, committing ₹5,000 crore (US$570 million) crore to multiple social impact projects. The company collaborates with various institutions including the Jamnalal Bajaj Foundation, Jankidevi Bajaj Gram Vikas Sanstha, and the Kamalnayan Bajaj Hospital. 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.