Bajaj Finance versus Bajaj Finserv:In the current era, NBFC plays a very crucial role in terms of the country's development, especially in these difficult times after the pandemic.
When it comes to NBFC investments, Bajaj Finance and Bajaj Finserv shares top the list thanks to impressive returns of +108.433% and +1.904% since 2002 and 2008 respectively.
In this article, we will cover a detailed comparison of Bajaj Finance vs Bajaj Finserv, two of the largest companies in the insurance and NBFC segments of India. Read on to learn the differences between the two as we break them down!
table of contents
Introduction to NBFCs
Before we get into the two actions, have you ever wondered if banks already exist and make loans, take deposits and provide financial services, so why do we have the NBFC? Do these make a difference? So let's understand what NBFCs do.
NBFCs or Non-Bank Finance Companies offer bank-like services but do not have a banking license. This prevents them from issuing cash checks and money orders.
The economy is divided into a wide range of subsectors with different sets of needs and wants. Banks alone cannot serve everyone with the same vision.
This is where NBFCs come into play. NBFCs function as intermediaries to channel resources from the lender (banks) to the economically scarce sector, mainly the unorganized sector.
NBFCs are more customer-oriented or personalized, which is not within the scope of banks. Through this service, they generate income from the difference in interest rates of the loans.
Consumer lending was the area where Bajaj Finance capitalized. Here most of the banks were not interested in joining the industry.
Now, let's compare Bajaj Finserv VS Bajaj Finance.
People tend to confuse a lot between these two as they both belong to the same domain and offer similar products only in different subsets. As? We answer below!
Bajaj Finance vs Bajaj Finserv: Resumen del sector
Bajaj Finance is under the umbrella of Bajaj Finserv. Formerly known as Bajaj Auto Finance, it was the investment arm of Bajaj Finserv, one of the biggest players in the NBFC segment in India.
Bajaj Finserv has a 52.49% stake in Bajaj Finance and a 74% stake in Bajaj Allianz Life Insurance and Bajaj Allianz General Insurance. Let's take a look at their organizational structure.
Even in times of liquidity crisis, the company has been able to manage its operations with financial stability and longevity. Higher standards by government agencies have made companies in this industry more resilient to the economic shocks and turmoil of recent years.
Many companies like IIFL, DHFL and SREI Infrastructure Finance have been struggling in these tough times. SREI Infrastructure Finance and DHFL, the third largest NBFC in this segment, went bankrupt!
Bajaj Finance and Bajaj Finserv have stood their ground amidst all the challenges and dominated this segment with their consistent performance.
Bajaj Finance:income streams
The personal finance or consumer loan segment deals with credit to consumers for personal or household use. Bajaj Finance offers durable consumer loans, lifestyle home loans, credit cards, two- and three-wheeler loans, construction equipment loans, etc.
In the pie chart above, we can see that the consumer credit segment contributed more than 45.9% of the majority of the revenue.
loans to SMEs
Bajaj Finance promotes small and medium businesses with unsecured loans for SMEs and easy capital requirements at low interest rates. This segment contributes around 17.4% of total revenue.
Bajaj Finance also covers the remote rural area and provides a credit line specifically for farmers in the rural sector. Bajaj Finance's New Kisan Credit Card Scheme offers loans and mortgages for land development and farm equipment at a low interest rate and a hassle-free incorporation process. With attractive growth in rural areas, this segment contributes 12.7%.
India is emerging as the startup capital of the world. Today, more and more companies require short-term loans, such as covering operating expenses, purchasing machinery, etc. Bajaj Finance offers up to Rs.45 lakhs. with a competitive interest rate that contributes 7.2% to revenue.
Mortgage loans or secured loans are given against collateral. Bajaj Finance offers loans up to Rs 5 crore against property. Very popular in urban areas and this item contributes 11.7% of the total revenue.
loans against securities
Similar to property loans, Bajaj Finance is also involved in providing financial assistance against securities. This contributes 5.1% of the total revenue.
Bajaj Finserv:income streams
Bajaj Finserv is a financial services division of Bajaj Holding and Investment Ltd. Unlike Bajaj Finance, it focuses on a larger scale by offering services in the asset management, wealth management and insurance sectors.
In the graph above, we can see that 26% of the contribution is paid by the life insurance industry to the revenue. Bajaj Finserv has been in a joint venture with the German multinational Allianz SE since 2001. Bajaj Allianz Insurance offers products in the life insurance sector related to financial planning and security.
With the joint venture with Allianz SE. Bajaj Finserv offers general insurance products that cover all insurances except life insurance such as car health, fire travel, etc. and are known as Bajaj Allianz General Insurance. This segment contributes with 29% of revenues.
Retail financing contributes 44% of total revenue and mainly offers credit lines to customers. Drawing its popularity from cities, it has become one of the biggest contributors to the credit cycle in India.
Bajaj Finserv owns and operates 138 wind turbines with a capacity of 65.2 MW. Bajaj Finserv is taking steps towards a green and renewable future. It contributes about 0.04% of revenue.
Bajaj Finserv's investments account for 0.8% of revenue.
Let's compare Bajaj Finance vs Bajaj Finserv with financial parameters from investment point of view
Income (Increase at top)
- Bajaj Finserv, the parent company of Bajaj Finance, has the highest turnover, but if we compare the CAGR over 5 years, Bajaj Finance leads with 23.00% earnings growth and Bajaj Finserv with 11.45%.
- Revenue for Bajaj Finserv grew 15.79% 3-year CAGR and for Bajaj Finance was 19.94%.
- Bajaj Finance saw continued growth in AUM over the year. In FY21-22, Bajaj Finance grew by 26.3% (YoY) to Rs.181,300 Cr.
Net income (bottom line growth)
- The share price of Bajaj Finance has increased 3.5 times over the past 5 years and is trading at Rs. 1,701 in July 2017. It is now at Rs. 6255!! While the share price of Bajaj finserv increased by about 2.5 times
- Bajaj Finserv is highly dependent on the performance of its subsidiaries, which affects its profitability. Although Bajaj Finance is an independent company, its performance is reflected in its earnings growth
- Taking into account the future potential of the insurance industry. Bajaj Finserv is expected to benefit greatly from its insurance division.
Let's compare Bajaj Finance vs. Bajaj Finserv for today's finance
|Valor nominal (₹)||5||Net profit margin (%)||22.3|
|Capital Purchase (Cr.)||3.78.750||real radio||1,72|
|Advertiser Actions (%)||55,9||debt in equity||7,78|
|P/L of shares||53,7||ROE (%)||17.5|
|BPA ($)||116||Dividend yield (%)||0,32|
- In FY21-22, Bajaj Finance net income grew by 84% (YoY) with a profit of Rs. 2125 Cr. with the largest contribution from Net Interest Income (NII) growing by 40% (YoY) to Rs.6335 Cr.
And the income 8532 Cr.
- Bajaj Finance showed improvement on the asset quality front with its net NPA showing a steady decline currently at 0.78%. in the third quarter of 21-22.
- Bajaj Finance has increased its client base by 26 lakhs with a total client base of over 5.54 Cr.
- The liquidity buffer was reduced to 14,300 Cr, reflecting the company's more aggressive approach to lending.
|Valor nominal (₹)||5||Net profit margin (%)||12.1|
|Capital Purchase (Cr.)||2.029.000||real radio||0,17|
|Advertiser Actions (%)||60,8||debt in equity||4|
|P/L of shares||44,5||ROE (%)||12|
|BPA ($)||286||Dividend yield (%)||0,03|
- In FY21-22, Bajaj Finserv reported a net profit of Rs. 2,349 Cr. and revenue of Rs. 17,586 Cr.
- In the third quarter of 21-22, Bajaj Alliance General Insurance continued its strong performance, while Bajaj Alliance Life Insurance performed exceptionally well with 68% growth in newly assessed premiums.
- Total revenue increased 10.4% (y/y) but auto sales remain disappointing
With Bajaj's impressive financial performance, let's look at the other 2 subsidiaries:
General Insurance Bajaj Allianz
- Net premium increased by 5% to Rs.1930 Cr.
- AUM increased by 10% to Rs. 23977 Cr.
- High solvency ratio of 333%
Bajaj Allianz Life Insurance
- Net premium grew by 39% to Rs.2377 Cr.
- 18% AUM growth to Rs. 83149 Cr.
- High solvency ratio of 604%
Let's compare Bajaj Finance vs Bajaj Finserv with a more realistic approach
- Looking at the Bajaj Finance price chart, it shows a gradual increase in stock prices over the period.
- The trendline and 200-day moving average were never broken, except during a Covid holiday, but they rebounded with even greater force.
- Bajaj Finance gave 200% higher returns compared to the Nifty 100 indices.
- Being a multi-exchange investment for at least 5 years that has attracted a large number of PEs among its peers is a red flag.
- Bajaj Finserv has a similar pricing schedule to Bajaj Finance. As holding.
- Bajaj Finserv envisions growth-oriented approach with EPS of 286 and ROE of 12.
- Equity prices remain above trend and have a 200-day moving average over the period, excluding Covid 19.
- After an excellent run in FY21-22 with the market correction since January. Bajaj Finserv has taken a huge hit with high net worth (HNI) and retail individuals reducing their holdings from 9.55% to 7.38% today.
- This drop in participation is reflected in share prices.
- Looking at the current scenario, the insurance sector appears to have a promising growth outlook with opportunities to achieve greater penetration in the core segment of regions that present a favorable scenario for Bajaj Finserv.
- Keeping its liquidity ratio on the high side, Bajaj Finance operates in a comparatively low risk market.
- Bajaj Finserv plans to enter the digital health sectors, which will allow the company to reach a wider range of populations.
- Bajaj funding is being raised aggressively now, raising funds through debt issuance up to the cap of 2.25 lakh Cr.
Closing: Final Verdict
Analyzing the above, both companies have solid fundamentals. Since both companies are growing, they have moved aggressively in their business segment, so although their PE may be high, they promise to deliver the same growth in the future as well.
But considering the growth during the period, the steady increase in AUM and the future prospects of far reaching customer centric services, Bajaj Finance looks like a much more favorable choice over Bajaj Finance versus Bajaj Finserv.
But in Bajaj Finserv's favor is the growth of its subsidiaries, Bajaj Finserv should also prosper.
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Bajaj Finserv is a financial service arm of Bajaj holding and investment Ltd. Unlike Bajaj Finance this focuses on the greater scale by offering services in asset management, wealth management, and insurance purviews.Is Bajaj Finance and Bajaj Finserv same or different? ›
Bajaj Finance Limited, the lending arm of Bajaj Finserv Limited, is one of the most diversified NBFCs in the Indian market, catering to more than 50 million customers across the country.What are the alternatives of Bajaj Finserv? ›
Bajaj Finserv's competitors include Mahindra Finance, Manappuram Finance, DMI Finance, Northern Arc. Bajaj Finserv ranks 1st among 469 active competitors.Is Bajaj Finance part of Bajaj Finserv? ›
Bajaj Finserv holds a 52.49% stake in Bajaj Finance Ltd., a listed non-bank with the strategy and structure of a bank.Is Bajaj Finserv worth buying? ›
Past 10 year's financial track record analysis by Moneyworks4me indicates that Bajaj Finserv Ltd is a good quality company. 2. Is Bajaj Finserv Ltd undervalued or overvalued? The key valuation ratios of Bajaj Finserv Ltd's currently when compared to its past seem to suggest it is in the Fair zone.Why is Bajaj Finserv falling? ›
Slowdown in AUM Growth: Bajaj Finance's AUM recorded a yearly growth of 27% to Rs 2.3 lakh crores. However, a quarterly growth of just 5.7% came in below expectations. This is primarily the reason why the share price of the company is currently on a downward spiral.Who is Bajaj Finserv owned by? ›
Sanjiv Bajaj is the Chairman of Bajaj Finance Limited and Chairman and Managing Director of Bajaj Finserv Limited, the holding company of the financial services businesses of the Bajaj Group, one of India's oldest and largest conglomerates, with 9M consolidated revenue of over ₹ 58,447 crore ($ 7.14 billion)* and ...Which is better Bajaj Finserv or credit card? ›
The Bajaj Finserv EMI Network Card charges are minimal and the benefit of the No-Cost EMI helps you save money on your purchases. Credit cards, on the other hand, attract high interest rates.
Providing both value and convenience via advanced technology, our partnership with RBL Bank Ltd. extends privileges of electronic payment to the entire consumer base.What is the minimum purchase amount for Bajaj Finserv? ›
Bajaj Finserv EMI Network Card is a payment system that comes with a pre-approved loan amount between Rs 30,000 to Rs 3,00,000. The loan amount is based on your credit assessment.
Bajaj Finance has a high safety rating of AAA(Stable)-ICRA and AAA/Stable ratings-CRISIL ensuring that your deposits are safe. Individuals can earn up to 8.20% p.a. on their FDs with Bajaj Finance. They also offer flexible interest payouts with monthly, quarterly, half-yearly and annual options.Is Bajaj Finserv safe for personal loan? ›
If you're alert, cross-check the details and opt for known financial institutions. This way, you will be safe. The pre-approved offers from Bajaj Finserv on their loans and other financial services make getting a personal loan safe, easy, quick, and convenient.What is Bajaj Finance interest rate? ›
The fixed deposit rates can vary for different banks and NBFCs. The interest rate for Bajaj Finance Fixed Deposit ranges from 7.11% p.a. to 8.35% p.a. for customers below 60 years of age. The FD rate for senior citizens ranges from 7.35% p.a. to 8.60% p.a.How does Bajaj Finserv work? ›
In that case, you get the options of plans with repayment with set amounts and tenures across 6 months, 9 months and 12 months. You are free to choose whichever suits you. You can check out the Bajaj Finserv EMI Network card apply online process or apply at our offline partner stores.What is the category of Bajaj Finserv? ›
Bajaj Finserv Ltd.
Bajaj Finserv had last split the face value of its shares from Rs 5 to Rs 1 in 2022. The share has been quoting on an ex-split basis from September 13, 2022.
quote is equal to 1465.250 INR at 2023-05-31. Based on our forecasts, a long-term increase is expected, the "BAJAJFINSV" stock price prognosis for 2028-05-26 is 2888.743 INR. With a 5-year investment, the revenue is expected to be around +97.15%. Your current $100 investment may be up to $197.15 in 2028.Why is Bajaj Finserv successful? ›
The consumer gets the comfort of paying monthly installment for the product at zero percent interest rate. The manufacturer receives the full amount of the product which increases the inventory turnover for them. Bajaj Finance earns through the processing fee as well as the rebate provided by the parties involved.Is Bajaj Finance a debt free company? ›
Debt Level: BAJFINANCE's net debt to equity ratio (308.2%) is considered high.What will be Bajaj Finserv share price in 2025? ›
|Year||Bajaj Finserv Share Price Targets (₹)|
Bajaj Finserv reported a rise of 31.41 per cent in consolidated net profit ₹1768.95 crore for the quarter ended 31 March,2023 . This is against a net profit of ₹1,346.08 crore in the corresponding quarter last fiscal.Is Bajaj Finserv a Fintech company? ›
Scaling Merchant Onboarding for Nation's leading Fintech Enterprise - Bajaj Finserv.Is it safe to invest in Bajaj Finance FD? ›
Diversify your portfolio
Moreover, with competitive interest rates of up to 8.60%, Bajaj Finance Fixed Deposit is a great option. Additionally, FDs have several other benefits in addition to the safety of investment and fixed returns. You can also avail of loans against them during a financial emergency.
Bajaj Allianz General Insurance Company Limited is a joint venture between Allianz SE, the world's leading insurer, and Bajaj Finserv Limited.What is the highest salary in Bajaj Finserv? ›
The average Bajaj Finance salary ranges from approximately ₹0.6 Lakhs per year for a Customer Relation Executive to ₹77.4 Lakhs per year for a Business Head. Salary estimates are based on 17.8k Bajaj Finance salaries received from various employees of Bajaj Finance.How much credit score required for Bajaj Finance? ›
The minimum credit score issued by CIBIL™ that is required for Bajaj Finserv EMI Card is 700. A credit score lower than 700 makes you ineligible for the Bajaj Finserv EMI card. The credit score issued by CIBIL™ is a three-digit number issued in the range of 300 to 900.What is Bajaj Finserv EMI card? ›
Bajaj Finserv Insta EMI Card allocates a customer identification number through which cardholders can fulfil the need for various goods and services by availing of a loan from Bajaj Finserv. The Insta EMI Card sanctions converting high-end bills into reasonable and convenient equated monthly instalments (EMIs).Can I buy gold Jewellery through Bajaj EMI card? ›
Gold cannot be bought using your Bajaj Finserv EMI Network Card as per the RBI guidelines. In fact, you cannot buy any gold jewellery using the EMI card. Even Gold purchase transactions on your credit cards cannot be converted to EMIs.How can I withdraw money from Bajaj EMI card? ›
Select your loan account from 'My Relations' from which you want to withdraw funds. Click on the 'Withdraw' option from 'Quick Actions'. Enter the amount you need to withdraw from your available limit and review your bank account information. Verify your details with an OTP sent to your registered mobile number.Which Bajaj card is best? ›
|Credit card name||Joining fees||Annual fees|
|Platinum Choice First Year Free SuperCard||Nil||Rs. 499+GST|
|Platinum Plus SuperCard||Rs. 999+GST||Rs. 999+GST|
|World Prime SuperCard||Rs. 2,999+GST||Rs. 2,999+GST|
|World Plus SuperCard||Rs. 4,999+GST||Rs. 4,999+GST|
Rs. 1,500 per bounce. Any delay in payment of monthly instalment shall attract penal interest at the rate of 3.5% per month on the monthly instalment outstanding, from the date of default until the receipt of the monthly instalment/ EMI. Payable as per state laws and deducted upfront from the loan amount. Re.Which is better IDFC or Bajaj Finserv? ›
The interest rate offered by IDFC Bank can go up to 9.25% p.a. Bajaj Finserv home loan has a slightly lower interest rate than IDFC home loan, but both are considered competitive in the market.Is Bajaj card accepted all over India? ›
You can use the Bajaj Finserv EMI Card at any network store, online or offline. Partner stores include major brand websites, e-commerce platforms, and physical stores across India. That's not all! You also get the No Cost EMI benefit on over a million products.What is the highest limit of Bajaj Finserv EMI card? ›
The Bajaj Finserv Insta EMI Card is a financing solution that allows you to shop for 1 million+ products on No Cost EMIs. With the Insta EMI Card, you get a pre-approved loan limit of up to Rs. 2 lakh that you can use at 1.5 lakh online and offline partner stores across 4,000+ cities.Can we withdraw money from Bajaj Finserv card? ›
For instance, the Bajaj Finserv RBL Bank SuperCard offers a cash withdrawal facility that remains interest-free for up to 50 days. This means that you can take up to 50 days to repay the withdrawn amount without paying any interest.What is the annual fee for Bajaj Super Card? ›
Own your Platinum Prime SuperCard by paying a joining fee of Rs. 999 (Plus Service Tax) & an annual fee of Rs. 999 (Plus Service Tax) from 2nd year onwards.Which card is better for EMI? ›
|Credit Card Provider||Interest Rate||Processing Fee|
|HDFC Bank||18% p.a.* | 15% p.a. onwards**||1% of the amount (Min. Rs. 150)|
|ICICI Bank||15.96% p.a.* | 12.99% p.a. onwards**||2% of the amount|
|RBL Bank||13% p.a. onwards**||–|
|SBI Card||22% p.a.* | 14% p.a. onwards**||2% (Min. Rs. 99 | Max. Rs. 1,000)|