Bajaj Finance invested Rs 225 crore in the equity shares and cumulative compulsorily convertible preference shares of Mobikwik as it looks at injecting the agility and speed of new age fintech companies into the financing business. This investment is in line with the firm’s ambition of offering instant loans through its digital EMI card. From January 2018, BFL’s customers would get a digital EMI card through the BFL Mobikwik digital wallet. BFL has also set sight on to become among the top credit card companies in the country in four years time with its co-branded cards with the RBL bank. Bajaj Finance managing director Rajeev Jain said the investment in Mobikwik was a strategic investment and gives them a 11.5% to 12% stake in Mobikwik. This will significantly augment customer experience at the point of sale and increase the repurchase rate, he said.
The company entered the EMI card segment with its EMI cards. “We have 10 million customers for this loan card and earlier it used to take 20 to 40 days to activate and has now come down to four days and will become instant in January ’18,” he said. The company will now take this physical card process and convert it into digital and deliver it to the mobile phone, Jain said. This will improve repurchasing rate as the customer who buys the EMI card gets loan approved instantly on the phone, he said. The company currently has 52,000 PoS outlets through which these loan cards are available, and 60% of the loans are from the existing customer base. In the credit card space, the tie up with RBL for co-branded credit cards, has seen the company grow to 1.35 lakh cards in four to five months. “We want to be among that top four to five companies in the credit card business,” Jain said.
PAT rises 36.51% in Q2
Bajaj Finance reported a 36.51% rise in PAT to Rs 557 crore during Q2FY18. Total income for the quarter went up by 33% to Rs 3,102 crore. New loans booked during Q2FY18 went up by 48% to Rs 3,231,078 crore. Total assets under management as of September 30, 2017 was up 38% to Rs 72,139 crore. Demand in semi-urban towns and rural has grown while impact of urban demand will be know in the week leading to the festival season, Rajeev Jain, MD of BFL said. Consumer finance segment grew by 42% to Rs 33,815 crore. The company was taking a cautious approach in the SME and Loan against Property segment as it sees the GST impact on SMEs to continue for another two to three quarters. Loan losses and provisions for Q2FY18 were at Rs 228 crore as against Rs 165 crore in Q2FY17. Gross NPA and Net NPA as of 30 September stood at 1.68% and 0.51% respectively.
Bajaj Finserv PAT up 13.24%
Bajaj Finserv Limited, the holding company for the Bajaj Group’s financial services business, reported a 13.24% growth in PAT (profit after tax) to Rs 652.3 crore during Q2FY18. Bajaj Finserv had a 27.71% y-o-y increase in consolidated revenue to Rs 7,561 crore during the quarter with growth in the financing as well as general insurance business. Bajaj Finserv participates in the financing business through holdings in Bajaj Finance Limited (BFL) and in the insurance business through Bajaj Allianz General Insurance Company Limited (BAGIC) and Bajaj Allianz Life Insurance Company Limited (BALIC). S Sreenivasan, CFO, Bajaj Finserv, said BAGIC reported one of its best combined ratio and possibly the best in general insurance industry. At a time when others are struggling to post underwriting profit, they have a combine ration of 88%. BAGIC recorded its highest ever quarterly gross written premium and profit after tax during Q2 FY18. PAT was up 11% to Rs 260 crore while GWP went up 31% to Rs 2,857 crore. BAGIC wrote crop insurance of Rs 1,145 crore, an increase of 55%. The company’s underwriting profit for Q2FY18 more than doubled to Rs 138 crore while investment and other income for Q2FY18 was down 14% to `247 crore during the second quarter.