If you are looking for a lucrative investment opportunity in the Indian financial sector, you might have come across the names of Bajaj Finserv and Bajaj Finance. These two companies are part of the Bajaj Group, one of the most respected and diversified business conglomerates in India. But what are the differences between them, and which one is a better choice for your portfolio?
In this blog, we will compare and contrast Bajaj Finserv and Bajaj Finance, two of the largest and most successful companies in the non-banking financial company (NBFC) and insurance segments of India. We will look at their working, revenue, and performance, as well as their products and services, social impact, and stock performance.
Overview of Bajaj Finserv Ltd.
Bajaj Finserv Ltd. plays a crucial role in India’s financial services sector as an unregistered Core Investment Company (CIC) in accordance with the Core Investment Companies (Reserve Bank) Direction, 2016.
Bajaj Finserv offers a diverse variety of financial solutions, including savings products, loans, insurance, and investments.
Financial Performance Highlights
As of Sep 2023, Bajaj Finserv Limited delivered a robust financial performance, achieving an operating profit of Rs 9950 cr.
Over the course of its 16-year journey, Bajaj Finserv Health has made significant strides in digital cashless healthcare. The platform boasts a network of 120,000+ doctors and 6,000+ lab touchpoints and collaborates with 1,800+ hospitals.
Bajaj Finserv Limited has touched the lives of 2 million individuals through its corporate social responsibility (CSR) programs. Engaging in 643 CSR projects, the company has actively contributed to various initiatives in areas such as healthcare, education, skilling, and inclusion, making a positive impact on society at large.
Stock Information (As of 22 Dec)
- Current Price: ₹ 1,680
- Change: +0.77%
- High / Low: ₹ 1,742 / ₹ 1,215
- Market Cap: ₹ 2,67,994 Cr.
- Operating profit as of September 2023- 9,950 Rs cr
Technology-Driven Growth
Bajaj Finserv’s commitment to innovation is evident in its tech-driven initiatives. The digital app platform played a pivotal role, with a substantial 35.5 million net users.
Additionally, Bajaj Finserv Ltd. (BFL) has strategically invested in enhancing its search ecosystem, establishing a robust groundwork to accommodate up to one billion web traffic in the medium term. BFL’s web platform has been instrumental, with more than 219 million customer visits, facilitating loan disbursals exceeding 5,000 crores in the fiscal year 2023.
Focus on Innovation and Stakeholder Holdings
Emphasising continuous innovation, Bajaj Finserv harnesses technology, data, and analytics to provide seamless and personalised experiences for its customers.
- The company holds a 52.49% stake in Bajaj Finance Ltd., employing a banking strategy and structure.
- Additionally, Bajaj Finserv has significant stakes in Bajaj Allianz Life Insurance Company Ltd. & Bajaj Allianz General Insurance Company Ltd.
- It also oversees subsidiaries like Bajaj Housing Finance Ltd. and Bajaj Financial Securities Ltd.
Bajaj Finserv Subsidiaries
Bajaj Finserv’s financial offerings extend to various sectors, including housing finance, brokering, and margin trade financing.
- Bajaj Finserv Health Ltd.
- Bajaj Finserv Ventures Ltd.
- Bajaj Finserv Asset Management Ltd.
- Bajaj Finserv Mutual Fund Trustee Ltd.
Social Impact Initiatives and Commitment to Inclusivity
Bajaj Finserv’s flagship program, BEYOND, empowers graduates from small towns, enabling them to secure employment in the financial services industry.
Lending Services by Bajaj Finance Limited
Bajaj Finance Limited (BFL), a prominent lending and investment arm of the Bajaj Finserv Group, is listed on both The Stock Exchange (BSE) and the National Stock Exchange (NSE). BFL operates across diverse sectors such as consumer, payments, rural, SME, commercial, and mortgage.
Protection and Savings Offerings
Bajaj Allianz General Insurance Company Limited (BAGIC), a joint venture between Bajaj Finserv Limited and Allianz SE, specialises in the general insurance business, including health insurance.
Overview of Bajaj Finance Ltd
Bajaj Finance Ltd. (BFL), a subsidiary of Bajaj Finserv Ltd., is a Non-Banking Financial Company (NBFC-D) authorized by RBI- the Reserve Bank of India accepts deposits. Categorised as an NBFC-Investment and Credit Company (NBFC-ICC), BFL is involved in both lending and deposit-taking activities. With a diversified lending portfolio, including retail, SMEs, and commercial customers, BFL has established a significant presence in both urban and rural India.
As a thirty-five-year-old enterprise, BFL has emerged as a leading player in the Indian NBFC sector, boasting a consolidated customer franchise of 69.14 million.
Financial Highlights
As of FY22, Bajaj Finance’s Assets Under Management (AUM) increased by 29% to Rs. 197,452 crores.
Here is the latest info as of 22nd December 2023:
· Market Cap: ₹ 4,50,863 Crores
· Current Stock Price: ₹ 7,295
· 52-Week High/Low: ₹ 8,192 / ₹ 5,486
· Stock Price to Earnings Ratio (P/E): 34.3
· Book Value: ₹ 988
Products and Services
Bajaj Finance offers variety of products and services.
Consumer Finance Products
- Durable Finance: Offers finance for household items with up to Rs. 4 lakh funding at zero or low-interest rates through the Bajaj Finserv EMI Network.
- Lifestyle Finance: Provides easy EMI loans for various lifestyle purchases, including home appliances, fashion, travel, and healthcare.
- Extended Warranty: IRDAI-approved program providing up to 3 years additional warranty in partnership with Bajaj Allianz General Insurance Co. Ltd. (BAGIC).
- Gold Loan: Loan offered against customer-owned gold with high loan limits, attractive interest rates, and flexible repayment options.
- Home Loan: Home loans up to Rs. 3.5 crore at the lowest interest rates, featuring additional top-up loans, doorstep services, and PMAY assistance.
- Digital Product Finance: Allows customers to buy products affordably from partner stores on the Bajaj Finserv EMI Network.
- EMI Card: Pre-approved loan of up to Rs. 4 lakh usable at partner stores with flexible tenors and no foreclosure charges.
- Personal Loan: Collateral-free personal loans up to Rs. 25 lakh with instant approval and flexible repayment tenors.
- Loan Against FD: Secured loan against fixed deposits with low-interest rates, quick processing, and flexible repayment options.
- Retail EMI: Easy financing on various products through the Bajaj Finance Ltd. retail network, with no hidden charges.
- Co-branded Wallet: Collaboration with MobiKwik for the Bajaj Finserv Wallet accepted at over 2 million stores, serving as a debit and credit facility wallet.
Commercial Lending and Financial Institutions
- Vendor Financing: Enables consumers to pay vendors on time with high loan amounts, Flexi loan facility, and quick disbursal.
- Light Engineering Finance: Personal financing option providing access to substantial funds for personal expenses.
- Large Value Lease Rental Discounting: Loan against rental receipts for tenants with funding between Rs. 10 Crore to Rs. 50 crore and foreclosure or part-prepayment facility.
- Loans against Securities: Hassle-free financing against various securities, offering funds without liquidating assets.
Corporate Finance and Investment
- Loans for warehouses, offering affordable financing up to Rs. 30 lakh without collateral.
- Safest investment option with flexibility, guaranteed returns, and attractive interest rates of up to 8.70%.
- Professionally managed mutual funds with low risk, high returns, and liquidity.
Difference between Bajaj Finance and Bajaj Finserv
| Parameter | Bajaj Finserv | Bajaj Finance |
| Business Model | Holding company for various financial services businesses, including insurance, lending, investment management, and retail financing. | NBFC, offering a diversified portfolio of lending and deposit products to individuals, SMEs, and commercial customers. |
| Type | Bajaj Finance focuses on consumer finance. | Bajaj Finserv is more diversified and focuses on insurance, investment management, and retail financing. |
| Revenue Streams | Insurance premium, interest income, fees and commission income, dividend income, and other income. | Interest income, fees and commission income, dividend income, and other income. |
Bajaj Finance vs Bajaj Finserv Share
In a comparison between Bajaj Finserv and Bajaj Finance shares, here is the latest financial snapshot as of 22nd December, 2023:
Bajaj Finserv:
- Market Cap: ₹2,66,430 Cr.
- Current Price: ₹1,671
- High / Low: ₹1,742 / ₹1,215
Bajaj Finance:
- Market Cap: ₹4,50,744 Cr.
- Current Price: ₹7,295
- High / Low: ₹8,192 / ₹5,486
Bajaj Finserv vs Bajaj Finance: Which is Better
The choice between Bajaj Finserv and Bajaj Finance depends on your personal preferences, goals, and risk appetite. If you are looking for a more stable and diversified investment option, you might prefer Bajaj Finserv, as it offers a broader and more diversified portfolio of financial services, including insurance, lending, investment management, and retail financing.
On the other hand, if you are looking for a more dynamic and growth-oriented investment option, you might prefer Bajaj Finance, as it offers a more focused and specialised portfolio of lending and deposit products, catering to individuals, SMEs, and commercial customers. It also has a higher market cap than Bajaj Finserv.
The best way to decide which is better between Bajaj Finserv and Bajaj Finance is to do your own research and analysis and consult a professional financial advisor if needed. You should also consider other factors, such as your investment horizon, liquidity needs, tax implications, and market conditions, before making any investment decision.
FAQs
Bajaj Finserv is the holding company for various financial services businesses under the Bajaj Group, such as Bajaj Finance, Bajaj Allianz General Insurance, Bajaj Allianz Life Insurance, and Bajaj Finserv Markets. Its purpose is to provide diversified and customer-centric financial services.
No, Bajaj Finance and Bajaj Finserv are not the same. Bajaj Finance is a subsidiary of Bajaj Finserv and the lending arm of the Bajaj Group. It is a leading NBFC- a non-banking financial company that offers a variety of lending and deposit products to individuals, SMEs, and commercial customers.
Source- bajajgroup, screener.in
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Disclaimer: Investments in the securities market are subject to market risks; read all the related documents carefully before investing.