BAJAJ FINANCE

Bajaj Finance Limited (BFL) is one of India’s leading non-banking financial

companies (NBFCs), offering a wide range of financial products and services to
retail, SME, and commercial customers. A subsidiary of Bajaj Finserv, BFL has
built a strong reputation for its customer-centric approach, innovative
products, and robust digital infrastructure. Headquartered in Pune, the
company operates across 4,000+ locations and serves over 83 million
customers as of FY2024. Bajaj Finance is known for its presence in consumer
finance, personal and business loans, housing finance, and wealth
management. It has effectively leveraged technology to provide seamless,
paperless, and real-time financial solutions through its popular mobile app and
digital platforms. The company’s consistent growth, strong asset quality, and
high capital adequacy ratio make it one of the most trusted and efficient
players in the NBFC sector. With a focus on financial inclusion and innovation,
Bajaj Finance continues to shape India’s lending landscape.

Economic Factors (FY2024)

1. Interest Rates
 The Reserve Bank of India (RBI) maintained a tight monetary policy
stance in FY2024, keeping the repo rate elevated at 6.5%. This led to
increased borrowing costs for NBFCs like Bajaj Finance, impacting their
net interest margins.
2. GDP Growth
  India's GDP grew at an estimated 6.5% in FY2024, driven by robust
domestic consumption and government spending. This economic
expansion supported increased demand for retail and SME credit,
benefiting lenders like Bajaj Finance.
3. Inflation
 Inflation remained within the RBI's target range, averaging around 5.4%
for the year. While this helped maintain consumer purchasing power, it
also necessitated cautious lending practices to mitigate potential credit
risks.
4. Unemployment
 The unemployment rate hovered around 7.6% in FY2024. Despite this,
Bajaj Finance managed to expand its customer base and maintain asset
quality, indicating effective risk management strategies.

Industry Factors (NBFC Sector in FY2024)

1. Market Size & Growth
 The NBFC sector's assets under management (AUM) grew significantly,
with Bajaj Finance's AUM increasing by 34% to ₹330,615 crore as of
March 31, 2024.
2. Key Segments
 NBFCs continued to focus on segments like consumer finance, SME
lending, and housing finance. Bajaj Finance, through its subsidiary Bajaj
Housing Finance, emerged as a leading home loan provider with an AUM
exceeding ₹90,000 crore.
3. Regulations
 The RBI's Scale-Based Regulation framework continued to influence
NBFC operations. In FY2024, Bajaj Finance faced regulatory action, with
the RBI advising a halt on sanctioning and disbursing two product lines
due to deficiencies related to the Key Fact Statement (KFS). The company
has since addressed these issues and requested a review.
4. Technology Use
 Digital transformation remained a key focus, with Bajaj Finance reporting
52.41 million customers on its app and disbursing ₹11,700 crore in
personal loans through the platform.

5. Competition
 The NBFC sector faced intensified competition from banks and fintech
companies. Bajaj Finance maintained its market position through
diversified offerings and technological advancements.
6. Porter’s Five Forces Summary
 Rivalry: High, due to numerous players and digital disruption.
 New Entrants: Moderate, as fintech lowers entry barriers.
 Supplier Power: Moderate-High, with funding primarily external.
 Customer Power: High, given multiple loan options.
 Substitutes: Moderate, including banks and P2P lenders.

Company-Specific Factors (Bajaj Finance FY2024)

1. Financial Highlights
 Assets Under Management (AUM): ₹330,615 crore, up 34% YoY.
 Net Interest Income (NII): ₹29,582 crore, a 29% increase.
 Net Total Income (NTI): ₹36,258 crore, up 26%.
 Profit After Tax (PAT): ₹14,451 crore, a 26% rise.
 Capital Adequacy Ratio: 22.52%, with Tier-I at 21.51%.

2. Products & Services

  Bajaj Finance offers a wide range of products, including personal loans,
SME finance, credit cards, housing loans, gold loans, wealth
management, insurance, stockbroking, and fixed deposits.
3. Technology & Innovation
 The company leveraged AI-backed credit models and real-time
disbursals. Its app saw significant engagement, with over 52 million users
and substantial loan disbursements.
4. Customer Base & Reach
 Customer franchise grew by 21% to 83.64 million.
 The company expanded its presence with over 198,250 active
distribution points across 4,145 locations.
5. Risks & Challenges
 Faced regulatory challenges, including RBI's directive to halt certain
product lines.
 Increase in loan losses and provisions by 45% to ₹4,631 crore, indicating
cautious provisioning amidst economic uncertainties.
6. Growth Opportunities
 Bajaj Housing Finance's IPO raised $782 million, with shares soaring by
130% on debut, highlighting investor confidence and providing capital for
further expansion.

GRAPHS AND CHARTS:

 1. AUM COMPARISON OVER THE YEARS

AUM (₹ Cr)
350000 330615

300000
246245
250000
197452
200000
147153 152947
150000
100000
50000
0
FY2020 FY2021 FY2022 FY2023 FY2024

AUM (₹ Cr)

Bajaj Finance’s total loan book (AUM) grew by 34% in just one year — that’s a
huge leap, taking it to over ₹3.3 lakh crore! This simply means more people and
businesses are trusting Bajaj Finance for loans. Whether it’s for a new home, a
smartphone, or a small business, people are turning to them — and the
company is clearly expanding fast.

2. CUSTOMER BASE OVER THE YEARS

Customer Base (Millions)

90 83.6
80
69
70
60 57
50 46
42
40
30
20
10
0
FY2020 FY2021 FY2022 FY2023 FY2024

Customer Base (Millions)

In FY2024, Bajaj Finance added over 14 million new customers, bringing the
total to 83.6 million. That’s nearly the population of Germany! More customers
means more trust. And with 52 million of them using the mobile app, it shows
how tech-savvy and accessible Bajaj has become — people like the
convenience and keep coming back.

3. TOTAL INCOME IN COMPARIOSN WITH NET PROFIT

TOTAL INCOME VS NET PROFIT

40000 36258

35000
28748
30000 25168
25000
18330 19161
20000 14451
15000 11408
7800
10000 5256 4500
5000

0
FY2020 FY2021 FY2022 FY2023 FY2024

Total Income (₹ Cr) Net Profit (₹ Cr)2

Bajaj Finance earned around ₹36,000 crore in total income, and out of that,
nearly ₹14,500 crore was profit. That’s a solid performance — they’re not just
growing, they’re doing it smartly. Even with rising costs and loan risks, they’ve
managed to keep a healthy chunk of their earnings. It shows good
management and smart business planning

4. LOAN BOOK COMPOSITION

Loan Book Composition refers to the breakdown of a lender’s total outstanding
loans (AUM) across various categories such as personal loans, consumer
durables, SME loans, housing finance, etc.
It helps stakeholders understand:
 Where the company is most invested
  What kind of borrowers it is lending to
 Risk diversification across sectors

LOAN BOOK COMPOSITON

2%
Consumer B2C (Retail Lending)
SME Lending
27%
37% Commercial Lending
Rural Lending
Mortgage / Housing Finance
9% Others (Cards, Investments)
18%
7%

Bajaj Finance’s loan book shows a well-diversified portfolio, with no over-

reliance on a single product.
 The high share in consumer B2C shows strength in short-term retail
lending.
 27% in housing loans indicates rising demand for secured, long-term
loans and positions Bajaj as a major home loan provider.
 SME and rural lending balances risk and supports financial inclusion.
This composition helps spread risk across sectors and ensures stability across
economic cycles.

Why Bajaj Finance Looks Like a Strong Investment (FY2024 View)

1. Strong Financial Performance
 Profit After Tax grew by 26% YoY to ₹14,451 crore.
 AUM rose by 34% to ₹330,615 crore — a sign of robust loan growth.
 High Capital Adequacy Ratio of 22.52%, showing strong financial stability.
 Consistent growth in net interest income, up 29% to ₹29,582 crore.

2. Strong Digital Ecosystem

 Over 52 million users on its app.
 ₹11,700 crore disbursed through digital channels.
 The company is clearly leading the digital lending space among NBFCs.

3. Diversified Loan Book

 Balanced exposure across personal, SME, rural, and housing loans.
 Bajaj Housing Finance IPO success (130% gain) boosted investor
confidence.

4. Growing Customer Base

 Customer base grew to 83.64 million (up 21% YoY).
 Pan-India distribution with 198,250+ active points of sale.