Bajaj Group is open to its life and general insurance partner Allianz SE of Germany picking up 49% stakes in the two insurance JVs as per the new FDI cap norms in the insurance companies of India.
“We would welcome that, if they want increase stakes to 49%,” said Bajaj Finserv MD Sanjiv Bajaj, adding that he cannot comment on whether the partner had expressed a desire in raising stake to 49% or if there was any talks between the two JV partners.
The Bajaj Group has two joint ventures with Allianz with 74% holding each in Bajaj Allianz General Insurance Company (BAGIC) and Bajaj Allianz Life Insurance Company (BALIC). “New business premium of the life insurance business is growing and it will translate into better profits,” Bajaj said about the life insurance business.
The two insurance companies and Bajaj Finance business results are consolidated at Bajaj Finserv, which recorded a flat net profit of R707.12 crore in Q4FY15. Bajaj Finserv total income rose 17% to R2,406 crore while gross revenue grew 20.63% to R6,157.14 crore.
“The topline growth was good but PAT was flat because of the fall in profits of the life insurance business. However, it was more than made up by the profits in the Bajaj Finance and General Insurance business,” Bajaj told FE. Bajaj Finance and Bajaj General Insurance continue to remain the growth drivers of the Bajaj Finserv business.
The life insurance profit was down 19% to R559 crore. Bajaj Finance had a strong year and profits were up 27% to R231 crore as consumer finance continues to grow and remain ahead of the market, Bajaj said. He expects steady growth in consumer finance to continue. The general insurance profit for the quarter was at R144 crore.
Bajaj said the finance arm, Bajaj Finance, will raise R1,800 crore for funding growth of its existing business. “We will raise R1,400 crore through QIP and R400 crore from Bajaj Finserv through a preferential issue of warrants convertible into equity shares,” said Bajaj.
For FY15, Bajaj Finserv’s consolidated profit grew 9% to R1,690 crore while consolidated gross revenues was up 17% to R19,589 crore. Consolidated income from operations was up 26% to R7,587 crore.
Bajaj Finserv is the holding company for the various financial services businesses under the Bajaj group.