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May 18, 2011, 01.11 PM IST | Source: Moneycontrol.com

Bajaj Fin to enter credit cards, infra lending biz

Non-banking finance company Bajaj Finance is planning to launch its credit card business by the July-September quarter. According to CEO Rajeev Jain, the company is looking for strategic partnership with a leading bank to get into this unsecured form of lending business.

Bajaj Fin to enter credit cards, infra lending biz
Saikat Das

Moneycontrol.com

Non-banking finance company Bajaj Finance is planning to launch its credit card business by  the July-September quarter. According to CEO Rajeev Jain, the company is looking for strategic partnership with a leading bank to get into this unsecured form of lending business.

“We are in talks with some banks. We aim to issue five lakh credit cards in the next three years after the launch. We would initially tap our 45,000 consumer durable customers to market our cards. Credit card spending is increasing in India,” Jain told Moneycontrol.com

At present the company  offers funding for two-three wheelers, consumer durables and construction equipment  buyouts. It also provides loans against mortgages, business loans to SMEs and personal loans . Its asset under management (AUM) stands at Rs 7,571 crore as on March 31, 2011.  Bajaj Finance has disbursed Rs 9,435 crore in those segments during the year 2010-11.

The company will start lending to mid to large infrastructure companies in a month’s time. In initial years, it will act as a division of the company. However, the company might think of floating a subsidiary if the division manages to generate encouraging business in 2 or 3 years. 

“We are bullish on India’s infrastructure story. Our infrastructure lending would form 10% of our AUM by the end of March, 2012,” pointed out Jain.

Meanwhile, Bajaj Finance posted robust fourth quarter results. Its Q4 net profit rose 184% year-on-year to Rs 71 crore. Its loan disbursement spurted 88% to Rs 2,487 crore. Net interest income (NII) rose 40% to Rs 277 crore.

“We expect 30-35% NII growth in FY12. The rising interest rates will affect our loan growth in July-August quarter in segments other than two wheeler and consumer durables. Our cost of funds have gone up by 200 basis points in last 5-6 months. We have increased our lending rates by 120 bps during the time,” Jain said.

The company’s capital adequacy ratio currently stands at 20%. It may consider raising capital in 2011-12 in proportion to its business growth.

 

Bajaj Finance stock price

On September 17, 2014, Bajaj Finance closed at Rs 2496.30, down Rs 38.2, or 1.51 percent. The 52-week high of the share was Rs 2645.00 and the 52-week low was Rs 1131.00.


The company's trailing 12-month (TTM) EPS was at Rs 150.50 per share as per the quarter ended June 2014. The stock's price-to-earnings (P/E) ratio was 16.59. The latest book value of the company is Rs 795.98 per share. At current value, the price-to-book value of the company is 3.14.

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