Current Market Prices for all the 3 Stocks.
- Bajaj Holdings – 2954 Rs / 2625 Rs
- Bajaj Finserv – 7742 Rs / 7200 Rs
- Bajaj Finance- 3953 Rs / 3600 Rs
Note-: Ample amount of Information is available about any of these companies so in order to save time we have made this report extremely short and to the Point.
Bajaj Holdings and Investments
Bajaj Holdings & Investment ltd (BHIL) a 100% debt free company part of Bajaj Group
is a de-merged entity created as per Order dated 18 December 2007 of the Hon’ble
Bombay High Court, whereby manufacturing undertaking has been transferred to the
new Bajaj Auto Limited (BAL) and its strategic business undertaking consisting of wind
farm business and financial services business has been vested with Bajaj Finsery Limited (BFS).
Later Bajaj Holdings & Investment was registered as a Non-Banking Financial
Company (NBFC) with Reserve Bank of India (RBI) as a ‘Systemically Important Non-
deposit taking NBFC.
Bajaj Holdings & Investment ltd derives its value from its holdings which at current
Market Price far exceeds the Marketcap of Bajaj Holdings & Investment ltd.
Key new stocks added to the portfolio in FY2019 were
- Britannia Industries,
- Dr. Lal Pathlabs
- Berger Paints
- Ultratech Cement
- L & T Technology Services
- IndusInd Bank
- Minda Industries.
Additions were made to its existing investments in
- HDFC Bank
- Reliance Industries
- L&T, Infosys
- Tech Mahindra.
BHIL’s largest unlisted equity investment is in the National Stock Exchange (NSE), which continues to perform well.
Bajaj Finserv is the holding company under which there are three key financial sector
(i) lending through Bajaj Finance Ltd. (BFL), which is itself a listed company;
(ii) general insurance, under Bajaj Allianz General Insurance Company Ltd., or BAGIC; and
(iii) life insurance, under Bajaj Allianz Life Insurance Company Ltd., or BALIC. The insurance businesses are unlisted.
In addition, there are wind farm assets in Maharashtra with an installed
capacity of 65.2 MW.
Retail Consumer: All Bajaj Finserv’s businesses have a strong emphasis on the retail segment with a pan-India brand presence. Retail consumer is served through D2C (Direct to Customer) at Point of Sale, online, dealers for consumer lending, bancassurance and insurance agents.
SME and Corporate: Bajaj Finance provides working Er growth capital in the high net worth SME space. The insurance companies serve these segments through a suite of corporate and group insurance products.
Rural Focus: Bajaj Allianz Life is a leading player among private insurers in this space through its branches and business partners. Bajaj Finance has a highly diversified portfolio in the rural locations offering a wide range of products in consumer and RSME business categories under a unique hub and spoke business model. Bajaj Allianz General has penetrated rural markets through its virtual points of presence.
Bajaj Finserv Ltd. serves millions of customers by providing solutions for asset acquisition through financing, asset protection through general insurance, family and income protection in the form of life and health insurance and retirement and
During the year, the Company set up a wholly-owned subsidiary called Bajaj Finserv Direct Ltd. (BFSD), by changing the name of an existing non-operative subsidiary, Bajaj Financial Holdings Ltd. Over time, this entity is expected to offer the complete range of financial products for retail consumers through a best-in-class digital platform.
- It will expand into 200 new towns in 4Q.
- There are 55-60m untapped but eligible customers today in India (over and above their 40m customer base).
- Average yields in auto finance are 23-24%.
- It will deliver 13.5-15% RoE in the HFC subsidiary once it scales up.
The Company BFL enjoyed yet another strong year of performance aided by a diversified product mix, robust volume growth, prudent operating costs and effective risk management. With a consolidated AUM of Rs 115,888 crore and a standalone AUM of Rs98,671 crore, BFL has emerged as one of the leading diversified NBFCs in the country today.
BFL focuses on six broad categories: (i) consumer lending (ii) SME lending (iii) commercial lending (iv) rural lending (v) deposits (vi) partnerships and services. It is present in 1,830 locations across the country, including 903 locations in rural/smaller towns and villages.
Consumer Lending BFL continued to be the dominant consumer durables, furniture and digital products lender in India in FY2019.
- BFL financed 12.7 million consumer durable and digital products purchases in FY2019 against 9.9 million in the previous year, a growth of 29%.
- BFL’s unique Existing Member Identification (EMI) card, with over 18.5 million cards in operation, enables customers to avail instant finance after the first purchase. In FY2019, EMI card enabled BFL to finance over 11.5 million purchases, across all sales finance categories, viz. consumer durables, digital products, lifestyle products, lifecare, e-commerce and other retail spends versus 6.75 million in FY2018, a growth of 70%.
- BFL was the largest financier of Bajaj Auto motorcycles and three-wheelers in FY2019.
- BFL’s lifestyle finance business financed approximately 481,000 transactions, which represented a growth of 52% over FY2018.
- Ecommerce-: BFL executed over 2,105,000 transactions in FY2019 compared to 702,000 in FY2018 — representing a threefold increase in volume.
- Personal loans cross-sell (PLCS) and salaried personal loans (SPL) AUM grew by 56% and 36%, respectively, over FY2018; to Rs 13,868 crore and Rs 8,683 crore.
- The retail spends financing business offers easy instalment options to customers for small ticket purchases like fashion, travel, insurance and small appliances. The business is operational in 50 locations with a footprint of over 17,000 partner stores across India. BFL financed more than 1,460,000 purchases in FY2019 compared to 712,000 in FY2018 — representing a twofold increase in volume.
SME Lending has two product offerings: (i) business loans to small and medium enterprises and to the self-employed, and (ii) professional loans. Business loans AUM grew by 21% over FY2018 to Rs 10,094 crore with presence across 650 locations.
Professional loans AUM grew by 73% over FY2018 to Rs 5,284 crore. Professional loans portfolio contributed to 34% of unsecured SME lending .
BFL has launched two new products in the SME lending business in FY2019, namely used car financing and secured enterprise loans.
Used car financing: BFL offers both refinancing and purchase financing of used cars under this business. Gross deployments in FY2019 were Rs 300 crore.
Secured enterprise loans: Under this business, BFL offers small ticket loans of around Rs 10 lakh against mortgage of self-occupied residential and commercial property in smaller towns. Gross deployments in FY2019 were AUM of Rs 300 crore.
At the end of FY2019, it was present in 903 locations across 13 states and union territories in India. The business had an AUM of Rs 9,243 crore as on 31 March 2019 — up by 69% from Rs 5,458 crore a year earlier.
- Consolidated assets under management (AUM) grew by 41% to Rs 115,888 crore.
- Consolidated total income rose by 45% to Rs 18,502 crore.
- Consolidated profit before tax (PBT) increased by 61% to Rs 6,179 crore.
- Consolidated profit after tax (PAT) grew by 60% to Rs 3,995 crore.
- Impairment of financial assets at a consolidated level was Rs 1,501 crore. At 0.63%, BFL’s
- Consolidated net NPA was among the lowest across all NBFCs.
- As on 31 March 2019, BFL’s capital adequacy on a standalone basis was 20.66%, which is well above the RBI norms. Tier I adequacy was 16.27%.
Conclusion-: Bajaj Finserv and Bajaj Finance are the two prominent stocks in the finance sector which have presence across all the Portfolios in the market be it mutual fund, Individual Investors or Body Corporate. Aldo Majority of the PMS Schemes may have these two stocks varying upon the exposure each of the schemes wish to provide.
The market may not have hit the bottom and nor do these stocks may have. But with this fall in the market and significant correction in the above mentioned stocks it may prove to be a significant opportunity to add any of the stocks in a staggered manner to the portfolio.