Bajaj Finance to launch microfinance, tractor and commercial vehicle financing

Bajaj Finance Ltd (BFL), which raises up to ₹10,000 crore through QIP and convertible warrants issues, is set to launch its microfinance business by November. The tractor financing business will be launched in January 2024 and commercial vehicle lending by June 2025, says managing director Rajeev Jain.

“We just launched a new car financing business. We will be launching microfinance in November, tractor financing in January next year and commercial vehicle lending by June 2025. That would complete what retail banking in India stands for,” says Jain. With this, BFL will have about 50 different lines of businesses. It added a non-captive two-wheeler financing business last year.

The non-banking financial services firm plans to raise up to ₹8,800 crore through the QIP issue, and ₹1,200 crore via convertible warrants. BFL's also plans to increase its presence from 4,000 to over 5,000 cities and towns. In the last financial year, it posted a 64% growth in profit to ₹11,508 crore. The income increased by 31% to ₹41,406 crore. The assets under management (AUM) also increased by 25% to ₹2.47 lakh crore. The company acquired 11.6 million new customers in the last financial year, increasing its customer base to 69.1 million.

BFL is estimated to add 14 million customers—11 million offline and 3 million digital—in this financial year, says Jain. “As the India stack is growing, the ratio of offline and digital customer acquisition will become 50-50 in the next 3-5 years,” he adds. 

According to BFL’s five-year roadmap, retail banking in India will grow by 16% versus historical growth of 13%. So they envisage the business strategies organised on new products, geographies, platforms, operational excellence and subsidiaries. Bajaj Housing Finance (BHFL) and Bajaj Securities (BSL) are the subsidiaries of the NBFC. BHFL is going to become ₹90,000 crore in AUM by this year. BSL wants to become in the top 3 in its business, Jain says.

Jain expects the non-banking financial market is going to expand with new NBFCs like Jio Financial Services and Godrej Capital. “India is growing and so is the GDP. The population is young. Every line of business has tremendous opportunity and also retail financing,” he adds.

Bajaj Finserv Chairman Sanjiv Bajaj recently said that the potential for financial inclusion in India is vast. He added that India might require 10 more large financial entities similar to the size of Bajaj Finance and HDFC Bank in the future.