The board of Bajaj Auto has approved the setting up of a 100 percent captive finance subsidiary that would finance only those products that are manufactured by the company.
“The new company is expected to strengthen the financing options for its customers, as financing is key to an automobile business,” Bajaj Auto said in a filing with the stock exchanges.
The name of the new company will likely be Bajaj Auto Consumer Finance, subject to approval of Ministry of Corporate Affairs. This is the second new company being formed by the company after the proposal to hive off the electric vehicle business unit and place it under a new company.
The Pune-based two-wheeler major on October 27 reported 12 percent increase in net profit for the quarter ended September 30, 2021 to Rs 1,275 crore as against Rs 1,138 crore posted in the same quarter last year.
The performance was greatly aided by a robust improvement in exports. The company exported 28 percent more two and three-wheelers during the reporting quarter. For the past several quarters Bajaj Auto’s exports have remained higher than its domestic sales.
In total the company saw 9 percent rise in volumes during the September quarter to 1.14 million units as against 1.05 million sold in the same quarter last year.
As on September 30, 2021, after making payment of dividend of Rs 4,051 crore, surplus cash and cash equivalents stood at Rs 17,526 crore as against Rs 19,097 crore as on June 30, 2021.
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