Dear Shareholder,
I am delighted to share with you the results of yet another year of good operational
and financial performance of your Company, Bajaj Finance Limited (BFL). Given below are
some performance highlights for FY2025.
BFL achieved a growth of 26% of its assets under management (AUM) increasing from H
330,615 crore in FY2024 to H 416,661 crore in FY2025.
Your Company's customer franchise expanded by 22%, now reaching over 101.82 million
customers.
The number of new loans booked was 43.42 million.
Net total income (NTI) grew by 24% to H 44,954 crore.
Pre-impairment operating profit increased by 25% to H 30,028 crore.
BFL's loan losses provisions for FY2025 were H 7,966 crore, an increase of 72% from H
4,631 crore in FY2024.
This was on account of macro-level deterioration, increasing leverage on unsecured
loans and rising stress across banking industry.
Your Company's Profit After Tax (PAT) grew by over 16% in FY2025, rising from H 14,451
crore to H 16,779 crore.
BFL delivered a Return on Average Assets (RoA) of 4.57% and a Return on Average Equity
(ROE) of 19.19% in FY2025.
Your Company successfully raised approximately US$ 1 billion of fully hedged External
Commercial Borrowings (ECB) as term loans from multiple banks in FY2025.
Let me now turn to the listing of Bajaj Housing Finance Limited (BHFL), hitherto a 100%
subsidiary of BFL. BHFL completed its listing in September 2024, a year ahead of timelines
stipulated in RBI's Scale Based Regulation. The Initial Public Offer (IPO) saw massive
response from both retail and institutional investors and created a record in terms of
highest number and amount of bid for any Indian IPO. For the records, it was an IPO of H
6,560 crore, which included the issuance of new equity shares amounting to H 3,560 crore
and an offer for sale by your Company amounting to H 3,000 crore. At the time, it was a
pathbreaking IPO.
Last year, I shared our blueprint (Long-Range Strategy) for the next decade, which
outlines our ambition, strategy, approach, and goals for customer share, market share, and
profit share. This blueprint envisions your Company becoming a prominent payments and
financial services company in India over the medium term. To achieve these goals, your
Company has made steady progress. Below are some key elements that have helped your
Company move closer to these goals, while also driving good performance:
Gold loan business was expanded to 1,209 branches as on 31 March 2025, with an AUM of H
8,307 crore, reflecting a 81% year-on-year growth.
Launched commercial vehicle financing in Q1 FY2025 and present across 100+ dealers.
Tractor financing was introduced in Q4 FY2024 and present across 850+ dealers.
Bharat Mortgages went live in Q2 FY2025.
Industrial equipment financing was successfully launched in Q3 FY2025.
Auto lease finance was introduced in Q2 FY2025.
The Bajaj Finserv App saw 70.57 million net installs, with a 90-day retention rate of
96% and an app rating of 4.78 out of 5. By the end of the FY2025, the app had almost 70.6
million customers.
Your Company achieved significant digital transformation with 95% digital KYC, 92%
e-mandate, and 98% e-agreement, reducing physical documents from 23% to 13%. At the risk
of hazarding a guess, this reduced share of physical documents is quite likely to be the
lowest among all significant domestic non-banking financing companies.
Your Company has further sharpened its visionary blueprint (Long-Range Strategy) and is
excited to embark on the journey of transforming BFL into a FINAI company. This
transformation will position your Company as a financial AI enterprise, offering a
comprehensive AI-based product suite for its 200 million customers by FY2029. By
integratingAIacrossallprocesses,yourCompanyaimstodeliversignificant operating leverage,
greater customer satisfaction, and higher growth.
It is time to briefly share with you what your Company is doing on its Financial (FIN)
and Artificial Intelligence (AI) initiatives.
FIN initiatives:
Accelerating customer acquisition: Acquire the next 100 million customers for BFL
by leveraging strategic partnerships and organic acquisition channels.
MSME, the next frontier of growth: Focus on the unaddressed segments of MSME by
leveraging both GST and Udyam registered entities and offer at least 10 products. This
will for MSMEs.
Future of Personal Loan: Create a comprehensive range of personal loan products
designed to cater to diverse customer segments across various geographies.
Optimize: Scale auto loan with low credit cost and create a viable payments
business.
Risk management: "Back to basics" returning to core principles that
assess a borrower's stability, ability, and intent to repay, and to re-emphasize
univariate risk-based decision-making and the art of underwriting for prudent risk
management.
Product strategy: Invest in new product lines to seize the India opportunity and
grow in a sustained manner: (i) leasing multi-product distribution; and (ii) green
financing for both solar and EV.
Bajaj Finance is constantly identifying opportunities to utilise AI for revenue,
cost-saving, design and engagement, credit, risk, productivity, and controllership. Today,
Bajaj Finance's AI strategies may sound futuristic. But it really isn't so.
Company's AI strategies and initiatives:
AI for revenue: This includes conversational bots for engaging experiences across
all sales and cross-sell channels.
AI for cost reduction: Increase employee, sales agent, and head office productivity
by 1.15x to 2x; automate sales and document management systems with conversational voice
bots, and several other allied initiatives.
AI for design and engagement: Transform interactions with digital interfaces,
transitioning from traditional grid-based designs to conversation-driven search and
chatbots for better customer engagement.
AI for risk: Convert unstructured data into structured data for robust
decision-making, identify patterns and generate new features. AI-enabled risk models
should have auditability, transparency and be supportive to operating management.
AI for credit: Use AI to support underwriter decisioning, enabling them to create
summaries, screen, validate, and generate recommendation reports.
AI for productivity: Improve productivity by enabling AI across the journey of the
loan origination system; reducing time in the B2B loan processes, enabling an AI helpdesk,
AI-enabled hiring, learning and development, and creating AI-based knowledge repositories.
AI for controllership: Automate all quality assurance processes, internal and
external audit processes, audit call recordings and key governance checks.
These are not coming out of an H. G. Wells or Isaac Asimov novel. These are there to be
had and leveraged. What it requires is dedicated investment and even more focused
organisational level commitment to AI as a tool that can make one move far faster than
earlier imagined. We at BFL are steadfast to our AI-driven transformational journey. As I
see it today, we will succeed in our path.
Your Company has always been dedicated to complying with all applicable regulations and
guidelines while driving business growth across all its business lines. With a dedicated
central compliance unit under the aegis of
Chief Compliance Officer (CCO), your Company ensures the highest standards of
compliance. Additionally, your Company has established specialized compliance units across
all business areas and select functions, such as sales, debt management services, and
process and technology compliance, to rigorously monitor adherence to regulatory
guidelines and organizational policies and processes.
If you will recollect, the Reserve Bank of India (RBI) had imposed restrictions on the
sanction and disbursal of loans under ‘eCOM' and the ‘Insta EMI Card' in the
previous financial year. I am happy to inform you that on 2 May 2024 it lifted these
restrictions, based on remedial actions taken by your Company.
Given the good performance of your Company, I could be tempted to go on and on. But I
shan't. You can read all the details in the detailed chapter on Management Discussion and
Analysis that accompanies this report. However, I must place on record a truly heartfelt
statement of gratitude. After years, Rajeev Jain has moved away from the active, hands-on
post of Managing Director to being the Executive Vice Chairman of your Company. We, as
shareholders, owe Rajeev a great deal for taking Bajaj Finance to where he has something
he did with passionate conviction and without respite right from the word go. Rajeev, on
behalf of the shareholders and myself, many thanks for everything.
As on 1 April 2025, Rajeev's position has been taken up by Anup Saha, who has also been
a BFL hand with a clear line of sight of what needs to be done for your Company and for
shareholder value. I wish Anup the best for his new task and proverbially present him with
a ‘good luck' mistletoe tree for him to stand under, as he drives your Company yet
forward in growth, profits and long-term shareholder value.
Before I conclude, I am pleased to inform you that your Company's Board of Directors
has approved a special dividend of H 12 per share (600% of the face value) from the
exceptional gain of H 2,544 crore generated by the company from the sale of BHFL shares as
part of the IPO listing. This is in addition to recommending a final dividend of H 44 per
share (2200% of the face value) for your approval.
Furthermore, I am even more excited to inform you that at its meeting on April 29,
2025, the Board of Directors has, subject to shareholder approval, approved a sub-division
of the face value of shares from H 2 to H 1 for fully paid equity shares, as well as the
issuance of four fully paid bonus equity shares for every one fully paid equity share.
These actions are our way of expressing gratitude for your unwavering trust and support
and underscore our belief in the strength of the Company's fundamentals and our commitment
to sharing the rewards of success with our valued shareholders.
My thanks to all your Company's employees for showing what commitment means, and for
generating superb results year after year. May we do so yet again.
It is now time to say ‘Till We Meet Again'. As always, it has been and will always
be my honour to serve as your chief fiduciary. And I pray that we continue generating the
stellar performance that we have gotten used to.
Yours sincerely,
Sanjiv Bajaj
Chairman