Tag: bajaj finance

Mcap of 6 of top-10 valued companies jump more than Rs 1.18 lakh cr, BFSI News, ET BFSI

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Six of the 10 most valued companies together added Rs 1,18,383.07 crore in market valuation last week, with major contribution coming in from Reliance Industries Limited. During the last week, the 30-share BSE benchmark jumped 619.07 points or 1.03 per cent.

While Reliance Industries Limited, Tata Consultancy Services, Infosys, HDFC, Bajaj Finance and Kotak Mahindra Bank were the gainers, HDFC Bank, Hindustan Unilever Limited, ICICI Bank and State Bank of India emerged as laggards.

The valuation of Reliance Industries Limited zoomed Rs 59,437.12 crore to reach Rs 16,44,511.70 crore.

Infosys added Rs 29,690.9 crore to take its market valuation to Rs 7,48,580.98 crore. HDFC’s valuation gained Rs 17,187 crore to Rs 5,41,557.77 crore and that of Tata Consultancy Services jumped Rs 5,715.04 crore to Rs 13,03,730.66 crore.

The market capitalisation (mcap) of Kotak Mahindra Bank rose by Rs 3,301.84 crore to Rs 4,11,183.32 crore and that of Bajaj Finance by Rs 3,051.17 crore to Rs 4,57,355.51 crore.

In contrast, the valuation of HDFC Bank Ltd diminished by Rs 22,545.39 crore to Rs 8,60,436.44 crore. State Bank of India’s market valuation declined by Rs 17,135.26 crore to Rs 4,56,270.76 crore.

The valuation of Hindustan Unilever Limited dipped by Rs 3,912.07 crore to reach Rs 5,65,546.62 crore and that of ICICI Bank by Rs 3,810.99 crore to Rs 5,39,016.40 crore.

In the ranking of most valued firms, Reliance Industries Limited was leading the chart followed by Tata Consultancy Services, HDFC Bank, Infosys, Hindustan Unilever Limited, HDFC, ICICI Bank, Bajaj Finance, State Bank of India and Kotak Mahindra Bank. PTI SUM MR



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High interest rates make Bajaj Finance FD the ideal investment avenue for one’s Diwali bonus, BFSI News, ET BFSI

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Pune (Maharashtra) [India], November 3: The commencement of Diwali is accompanied by the joy of receiving one’s Diwali bonus. With the much-awaited Diwali bonuses being credited widely, it can be tempting to splurge and treat oneself to some extravagance. Still, it would be a more prudent choice to invest a portion of one’s hard-earned income.

For working professionals, saving and investing should be the top priorities for budgeting their earnings. This is one reason why one must actively seek out better ways of investing their money. Amidst the sea of uncertainties and volatile market movements, the fixed deposit has proved to be a safe harbour for investors. Bajaj Finance is one such financier that offers investors the dual benefit of high FD interest rates along with deposit safety.
Here’s why one should invest in this instrument to yield high risk-free returns this Diwali:
Benefit from high FD interest rates

Bajaj Finance offers one of the highest FD interest rates, up to 6.50%, along with an extra rate benefit of 0.10% p.a. for online investors. Senior citizens get an additional rate benefit of 0.25% p.a. irrespective of the mode of investment.

Consider an example where an individual invests Rs. 2,00,000 choosing a 5-year tenor in a Bajaj Finance online FD, the table shows the expected returns at maturity.

Loan against fixed deposit for cash crunches

Bajaj Finance Fixed Deposit offers a loan against the FD facility to address emergencies. This way, investors will not have to break their FD and thus, benefit from accumulated interest. The maximum loan amount one can avail of is 75% of the FD value.

Online FD calculator to estimate returns

To make financial planning simple, Bajaj Finserv gives free access to an online fixed deposit calculator. With it, investors can determine the returns they’ll earn at maturity. One needs to select the investment amount and tenor to get the results.

Easy online application process

Amidst all the celebrations, investors can kick-start their investment journey from the comfort of their homes. Booking an FD with Bajaj Finance is now easier than ever with an end-to-end paperless and digital process. One has to fill an online form and submit a few essential documents to start investing. Investing online can fetch investors aged below 60 years an additional rate benefit of 0.10% p.a.

Highest safety and credibility

Market-linked investments may offer high returns, but one must keep a close eye on them to shield them from fluctuations and capital loss. Fixed deposits, in this case, are incredibly safe, owing to their non-equity-linked nature as opposed to mutual funds and stocks. Moreover, Bajaj Finance FDs come with the highest ratings of MAAA and FAAA from ICRA and CRISIL, ensuring that their savings grow safely. This way, investors can be confident that their earnings are in safe hands.

Investors can consider investing their bonuses in a Bajaj Finance Fixed Deposit to grow their savings without worrying about market uncertainties.



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IPO financing costs double as 5 IPOs set to hit market, raise Rs 31,000 crore, BFSI News, ET BFSI

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After the Reserve Bank of India capped the borrowing from NBFCs for IPO subscription to Rs 1 crore per borrower, investors have been hit by doubling interest rates in the last two months.

Funding rates have shot up as many large-sized IPOs are scheduled within a short span of time. Interest rates have risen to 12-13 per cent in the last two months as liquidity has tightened in the system. Liquidity is further seen going down in the next couple of weeks and funding rates may rise further. With five IPOs scheduled to hit the market by November 3 and aiming to raise Rs 31,000 crore, the demand for funds is bound to go up amid a liquidity crunch.

Five IPOs

Five companies are looking to mop up over Rs 31,000 crore cumulatively between October 28 and November 10. Industry players expect Nykaa to be the biggest draw. Its IPO is expected to generate bids between Rs 80,000 crore and Rs 90,000 crore in the HNI category.

NBFCs issue seven-day commercial papers (CPs) to meet this funding requirement. The CPs are issued at 5.5 to 6.5 per cent. Industry players said the huge borrowing requirement had also led to a 100-200 basis points increase in CP rates.

Bajaj Finance, Kotak Securities, IIFL, JM Financial, and Motilal Oswal are among NBFCs that are looking to borrow or have borrowed from the CP market to lend to HNIs to apply for IPOs of Nykaa and others.

Rising costs

With the increase in funding rates, the cost per share has gone up drastically for wealthy investors.

For instance, at 7% for seven days, the cost for one share of Nykaa comes at around Rs 151 for 100 times HNI portion subscription. At 11%, the cost will go up

to Rs 237 per share, and at 13%, it will be Rs 280 per share. This means investors will make money only if the Nykaa lists with a premium of more than Rs 280 per share if one borrows at 13%.

The IPOs of Nykaa and PB Fintech are currently traded at a grey market premium of Rs 670 and Rs 220 apiece, respectively.

Raising funds

While the Nykaa IPO will hit the market on Thursday to raise Rs 5,352 crore, the PB Fintech IPO will open for subscription on Monday, November 1, to raise

Rs 5,710 crore. There is demand for nearly Rs 1 lakh crore from high-net worth investors for these two IPOs against the availability of Rs 50,000-60,000 crore at one time

NBFCs are readying a war chest of close to Rs 2 lakh crore to lend to high net worth individuals (HNIs) for their IPO bets.



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Sensex rises over 100 pts in early trade; Nifty near 18,300, BFSI News, ET BFSI

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Mumbai, Equity benchmark Sensex advanced over 100 points in early trade on Wednesday tracking gains in index heavyweights like Reliance Industries, ICICI Bank and Asian Paints. The 30-share index was trading 106.71 points or 0.17 per cent higher at 61,456.97 in initial deals. Similarly, the Nifty advanced 26.70 points or 0.15 per cent to 18,295.10.

Asian Paints was the top gainer in the Sensex pack, rallying around 6 per cent, followed by ICICI Bank, Sun Pharma, Nestle India, Dr Reddy’s and TCS.

On the other hand, Axis Bank, Bajaj Finance, Tech Mahindra and IndusInd Bank were among the laggards.

In the previous session, the 30-share index ended 383.21 points or 0.63 per cent higher at 61,350.26, while Nifty surged 143 points or 0.79 per cent to 18,268.40.

Foreign institutional investors (FIIs) were net sellers in the capital market, as they offloaded shares worth Rs 2,368.66 crore on Tuesday, as per exchange data.

High input costs have adversely impacted margins and profitability of select consumer and manufacturing companies despite steady volume and sales growth, said Binod Modi Head-Strategy at Reliance Securities.

This essentially raises concerns about sustainability of earnings rebound in subsequent quarters, which has weighed on sentiments recently, he noted.

However, “despite that overall performance so far has been good with sharp growth in revenue aiding double digit growth in earnings,” he said, adding “in our view, the market may remain volatile with downward bias in the near term and investors will track the pricing power of industries”.

Elsewhere in Asia, bourses in Shanghai, Hong Kong, Tokyo and Seoul were trading with losses in mid-session deals.

Stock exchanges in the US ended on a positive note in the overnight session.

Meanwhile, international oil benchmark Brent crude fell 0.47 per cent to USD 85.25 per barrel.



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Bajaj Finance Q2 net up 53.5%

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Bajaj Finance reported a 53.5 per cent jump in its consolidated net profit for the second quarter of the fiscal to ₹1,480.99 crore against ₹964.88 crore in the corresponding period last fiscal.

For the quarter-ended September 30, total revenue from operations increased by 18.7 per cent to ₹7,731.36 crore from ₹6,513.15 crore a year ago.

NII rises

Net interest income for the second quarter of the fiscal increased by 28 per cent to ₹5,335 crore as against ₹4,162 crore a year ago.

Interest income reversal for the quarter stood at ₹322 crore as compared to ₹216 crore in the second quarter last fiscal.

New loans booked during the second quarter were up 75 per cent to 63.3 lakh from 36.2 lakh in the second quarter last fiscal.

Loan losses and provisions for the July to September 2021 quarter stood at ₹1,300 crore as against ₹1,700 crore in the second quarter last fiscal.

“During the quarter, the company has done accelerated write-offs of ₹355 crore of principal outstanding on account of Covid-19 related stress and advancement of write-off policy,” Bajaj Finance said in a statement on Tuesday.

The company holds management and macro-economic overlay of ₹832 crore as of September 30, 2021.

Gross non-performing assets and net NPA as of September 30, 2021 stood at 2.45 per cent and 1.1 per cent respectively, as against 2.96 per cent and 1.46 per cent as of June 30, 2021.

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Bajaj Finance Urges Customers to Stay Safe Against Online Frauds on Electronic Platform During Festive Season, BFSI News, ET BFSI

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Bajaj Finance Limited cautions its customers and the public at large to stay vigilant against online loan frauds and other types of frauds on electronic platform during this festive season. As a part of the Cybersecurity Awareness Month, the company issued an advisory to its customers over email and on their social media platforms, urging them to stay alert of the growing incidences of cyber frauds and how to stay safe online.

With festive season around, consumers are more prone to availing instant loans, shopping online, seeking various discounts and cashback offers which make them vulnerable to fall into the trap of cyber frauds. So, it’s critical that consumers remain alert and informed about frauds such as (including, but not limited to) fake ads on social media, website impersonation, identity theft, fake job offers, vishing, phishing, sim swapping, UPI frauds, fake loan approval letters, ‘too good to be true loan offers’, suspicious phone calls, phone calls by impersonators claiming to be representatives of Bajaj Finance Ltd., suspicious links received on SMS or on various messenger platforms etc. (“frauds on electronic platform”).

The awareness advisory is a part of the continuous efforts of the company towards educating customers about frauds on electronic platform, the modus operandi of fraudsters who target unsuspecting users to carry out loan frauds and cyber security scams and the necessary safety measures to follow to avoid getting duped.



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Gold loans shine the brightest in banks’ loan portfolio, BFSI News, ET BFSI

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Gold loans have emerged as the fastest-growing major loan segment as people have pawned their jewellery and lenders look at avenues of low-risk growth. Outstanding loans against gold jewellery stood at Rs 62,926 crore as on August 27, up 66% on a year-on-year basis, according to the Reserve Bank of India (RBI) data.

Gold loans are often used to finance consumption spending, such as children’s education, weddings, illnesses or to meet household expenses during distress.

Public sector banks have also entered the segment to further grow their retail business. Despite regulatory arbitrage of higher loan-to-value lending in March 2021, banks have continued aggressively disburse gold loans.

Gold loans were up 1% on month in August 2021 as restrictions during COVID-19 eased and economic activities grew.

Loan demand picked up from the beginning of July as COVID-19 cases started declining. Gold loans via non-banking finance companies (NBFCs) had reported higher customer walk-ins.

LTV impact

However, gold loans have grown a mere 3.6% YTD, which is in contrast with the 54% CAGR seen in gold loan growth over the past two years.

RBI had raised the LTV of 90% on gold loans, which allowed banks to lend up to 90% of the value of the collateral.

However, it withdrew special allowance for banks from April 2021, impacting loan growth.

The average ticket size of loans that customers are opting for is Rs 55,000-60,000, which are rising for many lenders, showed growing signs of distress.

Gold loan NBFCs saw higher competition in the gold loan business last fiscal as banks grew their portfolio taking advantage of the special LIV allowance given to them by the RBI.

The expansion

With growth returning, gold financiers are now gearing up to tap the expected surge in gold loans.

Muthoot FinCorp has expanded its physical network by more than 100 new branches, mainly in the north, east and west regions of India, most of which were in rural and semi-urban areas. The NBFC had opened 70 branches in FY20.

Muthoot’s gold asset under management (AUM) grew at a compound annual growth rate of 12% between FY15 and FY20. In FY21, the portfolio grew 27%.

Pune-based Bajaj Finance has increased its gold loan branches from 480 to 700 in the last financial year and plans to add 100 plus branches this fiscal.

Its loan book grew 52% last year to Rs 2,300 crore, while it saw an increase in ticket sizes from Rs 75,000 to Rs 85,000 last year.

Shriram City Union Finance is also looking to ramp up its gold financing business this financial year, changing its strategy of focusing on other loan portfolios.



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Bank, NBFCs report spurt in Q2 advances as lending recovery picks up, BFSI News, ET BFSI

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Most banks and non-banking finance companies reported a jump in disbursal of advances in the quarter ended September in a sign that credit uptake is rising.

HDFC Bank saw its advances book grow by around 15.4% year on year at the end of the September quarter, proforma numbers released by the private sector lender showed. Its total loans aggregated to Rs 11.98 lakh crore at the end of September, up 4.4% sequentially. Its total loans were at Rs 10.38 lakh crore at the end of September 2020.

As per the bank’s internal business classification, retail loans during the September quarter grew by around 13% year on year and 5.5% over June quarter. Commercial and rural banking loans grew by around 27.5% y-o-y while other wholesale loans grew by around 6%.

Mortgage lender HDFC assigned loans amounting to Rs 7,132 crore at the end of the September quarter versus Rs 3,026 crore a year earlier. It sold loans

worth Rs 27,199 crore in the preceding 12 months versus Rs 14,138 crore in the previous year, regulatory filings show.

Private sector lender

IndusInd Bank

IndusInd Bank reported better-than-expected credit growth of 10% with total loans at Rs 2.2 lakh crore at the end of the September quarter, preliminary numbers filed with stock exchanges showed.

IDFC First Bank posted 9.75% growth in advances at Rs 1,17,243 crore for the second quarter ended September.

Private lender Yes Bank posted a 3.6% rise in its advances to Rs 1.72 lakh crore, though retail disbursements grew at a faster rate and grew by 126.6% over last

year to Rs 8531 crore at the end of the September quarter as against Rs 3764 crore a year ago.

NBFCs

Leading non-bank lender Bajaj Finance reported it had booked 6.3 million new loans at the end of the September quarter versus 3.6 million a year ago. It’s

assets under management (AUM) stood at Rs 1.66 lakh crore for the quarter under review as against Rs 1.37 lakh crore a year earlier.

Non-bank lender Mahindra & Mahindra Financial Services posted a 60% year-on-year growth in disbursements at Rs 6,450 crore at the end of the September

quarter. With further improvement in mobility during September, the collection efficiency for the NBFC was reported at 100% for September 2021.

Subject to improvement in auto supply chain, the company is hopeful of a good Q3 FY22 ahead, supported by festival season and harvest cash flow.” M&M Finance said.

AU Small Finance Bank

AU Small Finance Bank Ltd’s total deposits were up 45% on year at Rs 39,030 crore as of September 30, according to provisional data from the bank. Gross advances rose 32% on year to Rs 36,405 crore. Of the total gross advances, the small finance bank restructured 800 accounts worth Rs 800 crore in July-September. Disbursements rose 57% on year and 171% on quarter to Rs 5135 crore. It also made disbursements worth 530 mln rupees under the Reserve Bank of India’s targeted long-term repo operations.

RBL Bank’s total deposits rose 17% on year as of Sep 30, according to provisional data from the bank. Deposits stood at 755.9 bln rupees, up 1% on quarter. The bank’s gross advances rose 1% on year to Rs 58,046 crore as on September 30. Of the gross advances, 55% comprised retail advances while the remaining 45% is in the wholesale category.



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BoB step up on super app play, faces a tough competition, BFSI News, ET BFSI

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The race for financial super apps in India is getting hotter.

Bank of Baroda will position its new digital platform bob World as the main bank and all banking channels will be an adjunct to the primary platform. The public sector lender is adopting a strategy similar to SBI, which is working to integrate all services on its Yono platform.

Bank of Baroda MD & CEO Sanjiv Chadha has said that post-pandemic, the bank has seen a surge in digital transactions and twice the number of branch visits are happening on the app. “So rather than being an adjunct to the bank, it will be the bank and the other parts of the lender will become an adjunct. The thought was to enable everything that can be done in the branch within the app,” said Chadha.

Here are other few banks and companies that are building up the super app.

Tata Group

BoB step up on super app play, faces a tough competition

Tata Group is planning to come up with its own super app and bring its various consumer businesses under one digital umbrella and offer a seamless omnichannel experience. It is also making acquisitions such as Bigbasket and 1mg to bolster its digital presence.

“It will be a super app, a lot of apps in apps and so on … We have a very big opportunity … How do we give a simple online experience connecting all of this, and at the same time a beautiful omnichannel experience? That is the vision,” N Chandrasekaran, chairman, Tata Sons had said.

The company is looking to leverage its huge consumer base which is spread across various categories and build a “world-class platform out of India to serve the Indian consumer”.

Tata Group has a host of consumer-facing brands that include grocery items, fashion brands, and electronics brands.

In terms of financial services, Tata Group has an insurance company as well as a consumer finance arm, which can be easily integrated into its super app.

Paytm

BoB step up on super app play, faces a tough competition

Paytm, which lacks services such as ride hailing, food delivery, and online groceries, is the leader in the race at present. The app had 85.49 million monthly active users in March 2020. The company has launched a mini-apps store and partnered with companies like Ola, Domino’s, and Decathlon.

It plans to have a million such apps on its store by 2021. Mini apps are custom-built web apps that give users an app-like experience without needing to download one. The listing and distribution of these mini apps within the Paytm app is free of charge, and users can use the Paytm wallet, Paytm Payments Bank, UPI, or net banking for payments at no charges, and credit cards at a 2% fee. These apps are low-cost and quick to build, using HTML and JavaScript.

The company claims it has 325 million registered wallets, which is higher than the 200 million active UPI handles that have been created in the country.

Now the company has set its sights on using the platform to sell multiple financial services such as digital gold, mutual funds, insurance, and consumer and business loans.

SBI Yono

BoB step up on super app play, faces a tough competition

State Bank of India (SBI) is looking to build its super app Yono into a wider platform that can be used by rival lenders. The bank’s plans to create a platform for Yono that will be integrated with regional rural banks or cooperative banks. The plan is to turn the app into a platform where all banks, including SBI, can offer their products and services. The bank feels that the product will be more valuable to investors once the app is fully built out as a platform.

Yono user base has nearly doubled to 32 million at the end of December 2020 from 17 million a year ago.

SBI disbursed personal loans worth Rs 15,996 crore through more than 1 million Yono loan accounts between April and December 2020. It is now looking to extend it to home loan customers and make the entire process online. It is also planning to go big with its multi-lingual Yono Krishi platform that offers services such as Yono Khata, Yono Bachat, Yono Mitra and Yono Mandi to its farm customers. It wants to expand Yono Business through which it has made it easier for corporate customers to apply for letters of credit and bank guarantees.

Reliance Retail

BoB step up on super app play, faces a tough competition

Reliance Retail Ventures Ltd’s acquisition of a controlling stake in business-to-business (B2B) search engine Just Dial (JD) will provide it with access to a large merchant base for its new commerce platform JioMart. It will also allow it to harness JD’s evolution into a super app that will help book flights, train and bus tickets, cabs and hotel rooms and pay bills, as well as provide other services.

Reliance Retail plans to onboard 10 million merchant partners for its new commerce initiative over the next three years. The acquisition will allow RRVL to leverage JD’s database of 30.4 million business listings and its consumer traffic of 129 million quarterly unique users as on March 31, 2021.

JD’s B2B platform, JD Mart, matches wholesalers and manufacturers with retailers and industrial buyers, according to Credit Suisse.

Also, Facebook and telecom giant Reliance Jio are coming together to figure out the possibility of a super app, similar to the multipurpose Chinese platform WeChat. They are reportedly hoping to develop the app using the WhatsApp platform as well as its huge user base.

The platform would be a place for users to chat, while also letting them shop for groceries from Reliance Retail stores, for clothes and apparel and make digital payments using JioMoney.

WhatsApp

BoB step up on super app play, faces a tough competition

WhatsApp has a vast user base in India, but it has too few services to offer and must build and maintain its fintech muscle. The variety of its product portfolio and the speed of implementation will determine whether it can topple the incumbents in India. It may also have to face regulatory hurdles in India.

Bajaj Finance

BoB step up on super app play, faces a tough competition

Bajaj Finance has recently stepped up its wallet business. Its cross-sell franchise has about 27 million customers with around 70% of all no-cost EMI loans given for offline consumer durable purchases being through it.

Bajaj has recently launched a payments app and looks to be on the way to build a super app. The launch of the digital wallet is part of a broader strategy by the consumer NBFC to expand its digital finance offerings. The company has been rolling out ‘Bajaj Pay’ in phases to expand into the payments segment.



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Jeffries’ Christopher Wood adds Bajaj Finance to his Asia ex-Japan portfolio, BFSI News, ET BFSI

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NEW DELHI: Jefferies’ Global Head of Equities, Christopher Wood, remains bullish on India as he sees new levers of growth in this economy. And to that end, he has just added another Indian stock in his Asia ex-Japan long only portfolio.

Wood in his latest Greed & fear report said he is adding Bajaj Finance to the portfolio with a 4 per cent weightage. It replaces LG Chem, the Korean chemical company. Bajaj Finance was already part of Wood’s long-only India portfolio.

With this change, Indian stocks have 35 per cent weightage in the Asia ex-Japan portfolio now. This is more than the combined weight of China and Taiwan. Among other territories that are present in the portfolio are Korea, Australia, Hong Kong and the Asean region.

Bajaj Finance has seen massive investor interest in the past few years. The stock has more than doubled in the past one year thanks to its strong balance sheet, which has helped it wade through the Covid-19 pandemic despite some slowdown in business growth.

Moreover, with India’s likely inclusion in global bond indices, Bajaj Finance stands to be one of the big beneficiaries, Morgan Stanley said in its report.

Besides including Bajaj Finance, Wood has also increased the weight of Australia in the Asia Pacific ex-Japan relative return portfolio by two percentage points at the expense of China. Moreover, he said an investment will also be initiated in the liquid copper play, OZ Minerals, in the Asia ex-Japan long-only portfolio

The nervousness over tech companies in China, thanks to the government’s tightening, has had an impact on Wood’s portfolios. He removed Alibaba from China long-only equity portfolio and added Hua Hong Semiconductor. He also increased the weightage of China Telecom.

Can ETFs be counterproductive?
Exchange-traded funds (ETFs) have grown to be a primary mode of investment for retail and many institutional investors, especially in the developed economies. But in the light of the China’s gag on its Internet companies, some concerns have arisen.

In the US, internet companies have grown to be among the biggest ones. They have become so big that many lawmakers have demanded that they be broken up to rein in their clout. Those voices have gathered momentum, especially in the backdrop of the developments in China.

Wood says this could create problems for ETFs. “The ultimate problem with passive investing, otherwise known as investor socialism, is that everybody owns the same thing; a trend further exacerbated by the boom in investing in index tracking ETFs,” he said. “With the six big tech stocks now accounting for 24.7 per cent of the S&P500 market capitalisation, the risks are obvious if Washington ever summons the backbone to actually do something about the Big Tech as opposed to just talking about it.”



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