Bajaj Housing Finance Limited a non-deposit taking Housing Finance Company (HFC), registered with the National Housing Bank since September 24, 2015, and engaged in mortgage lending since 2018.
It offers financial solutions tailored to individuals and corporate entities for the purchase and renovation of homes and commercial spaces. The mortgage product suite is comprehensive and comprises (i) home loans; (ii) loans against property (LAP); (iii) lease rental discounting and (iv) developer financing. Furthermore, company's primary emphasis is on individual retail housing loans, complemented by a diversified collection of lease rental discounting and developer loans.
As at March 31, 2024, company's assets under management (AUM) was Rs. 91,370.4 Cr, reflecting a CAGR of 30.9% between Fiscals 2022 to 2024.
Strengths And Risks
+ Distinguished Heritage of the 'Bajaj' brand: The Bajaj group was founded in 1926. It is a prominent Indian conglomerate known for its diverse business interests across various sectors. Company is wholly-owned subsidiary of Bajaj Finance Limited, one of India’s largest NBFCs. The financial services businesses of the Bajaj group are primarily carried out through subsidiaries of Bajaj Finserv Limited, one of which is Bajaj Finance Limited.
+ Second Largest HFC in India : Company has grown to be the second largest HFC and was the eighth largest NBFC in India (in terms of AUM) as at March 31, 2024. It achieved this within a short period of time since the commencement of operations in Fiscal 2018. Its AUM has grown at a CAGR of 30.9% from Fiscal 2022 to Fiscal
2024 making it the fourth fastest growing HFC/NBFC.
+ Omni-channel Sourcing Strategy: Bajaj Housing Finance has a strategic presence across mortgage-centric markets with the following key components: branches, centralized hubs and active channel partners. The distribution network included 215 branches, six centralized hubs for retail underwriting and seven centralized processing hubs for loan processing) and 1,784 active channel partners.
+ Well defined Credit and Risk Management: Company's credit and risk management policies have helped them maintain the lowest NPA and among peers. They maintain a comprehensive risk management framework supported by digitized processes.
+ Cost-effective Borrowing Sources: Company has adopted a diversified borrowing strategy, moving from a reliance on bank loans to a more diverse borrowing portfolio that includes bank loans, non-convertible debentures, commercial papers
and NHB refinance.
- Default Risk: Company's mortgage product portfolio primarily consists of home loans, loans against property, lease rental discounting and developer financing. The underlying security of loans is primarily mortgages to salaried and self employed segment which can be risky in times of economic downturn.
- Volatility in Interest Rates,: Business may be impacted by volatility in interest rates, which could cause company's Net Interest Income, Net Interest Margins and the value of fixed income portfolio to decline.
- Real Estate Market: Company's portfolio is significantly exposed to real estate, and any significant downturn or adverse
developments in the real estate sector may lead to an increase in losses.
- Regional Concentration: Company's assets under management are concentrated in Maharashtra, Karnataka, Telangana, Gujarat, and New Delhi and any adverse developments in these regions could have an adverse effect on business.
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