Dear Shareholder,
Let me begin with a tribute to Madhur Bajaj who passed away on 11 April
2025. He was until recently a director of Bajaj Finserv and other Bajaj group companies
for over three decades. We will miss his valuable support which we had during his long
association with the group.
Your Company's vision is to be a diversified yet integrated financial
services entity with a pan-India presence and offer lifecycle financial solutions for its
various customers.
The needs of all customers across their financial lifecycle ideally
involve five phases:
1) Asset acquisition: These are assisted through loans (be these
personal, home and commercial).
2) Asset protection: This is carried out through general insurance
policies.
3) Family health and income protection: These are done using
general, health and life insurance, guaranteed savings and digital access to the health
ecosystem.
4) Investment and wealth management: These are provided through
unit-linked investment products (ULIPs), mutual funds, fixed deposits and shares.
5) Retirement: This is met by annuities.
These needs are provided by companies through omnichannel (a) products
and solutions, and (b) digital-first platforms. Within your Company, these are:
a) Products and solutions, provided by:
i. Bajaj Finance Ltd. (BFL), a large, listed, well-recognised and
significantly profitable consumer finance and lending business in which BFS holds 51.39%
stake; and its listed subsidiary, Bajaj Housing Finance Ltd. (BHFL) in which BFL holds
88.75% stake.
ii. Bajaj Allianz General Insurance Company Ltd. (BAGIC); and Bajaj
Allianz Life Insurance Company Ltd. (BALIC). These are unlisted joint ventures with
Allianz SE of Germany, the global insurance and asset management company. In each of these
companies, BFS holds 74% stake.
iii. Bajaj Finserv Asset Management Ltd. (BFS AMC), an unlisted
wholly-owned subsidiary of BFS.
It is in the mutual fund business and offers host of innovative
investment products and solutions.
b) Digital-first platforms, offered via:
i. Bajaj Finserv Direct Ltd. (BFSD), an unlisted subsidiary in which
BFS holds 80.10% stake with the remaining 19.90% held by BFL. BFSD operates a financial
products marketplace and offers technology services;
ii. Bajaj Finserv Health Ltd., a health-tech venture, in which BFS
holds 100% stake; and
iii. Bajaj Financial Securities Ltd. (BFSL), another wholly-owned
subsidiary of BFL which provides digital stock-broking and demat services.
What is role of Bajaj Finserv across all these companiesRs
While it may still look to some of you that Bajaj Finserv (BFS) is like
a holding company, it is much more than that. At the risk of repetition, let me clearly
reiterate that the fundamental rationale of BFS is to continuously integrate the various
companies under its wing - both directly and increasingly digitally - and, by doing so,
enhance customer experience in ways such that the aggregate becomes larger than the sum of
its parts.
Bajaj Finserv's role hence is to regularly monitor and engage with its
companies with some key objectives:
• Be the preferred partner for all financial lifecycle needs of
customers.
• Create constant value across the customer lifecycle.
• Build maintainable businesses to deliver long-term sustainable
profit, meaningful market share and effectively use capital - and so deliver superior
shareholder returns.
• Be a place where innovation, agility and ownership thrives, thus
creating great leaders who build long-term businesses to delight customers.
• Focus on regulatory compliances proactively in letter and
spirit.
Your Company's monitoring and engaging roles are under six heads:
1) Business and strategy: Rigorous engagement in long range
planning and annual operating plans; regular review of all businesses and their SBUs; and
periodic analysis of new business opportunities as well as strategic investments.
2) Risk management: Harmonisation of risk policies and framework;
regular engagement with the Chief Risk Officers of the businesses; periodic review of top
enterprise risks including credit, business, financial, operational, reputational, as well
as the mitigation actions planned; and driving risk-related projects across the group.
3) Collaboration and best practices: These involve group knowledge
forums covering analytics, technology, investments, governance, and the like;
cross-company projects on data, innovation and digital strategy; and a stress
identification forum to identify any cross-functional view on investment risks across the
group.
4) People/HR: The notion of 'One Finserv' which translates to group
talent mobility; group young leader management trainee programmes; 30 Under 30 programme;
and a merit-based remuneration plan combining fixed cash, annual bonus and ESOPs.
5) Customer experience, investments and ESG: To define customer
service protocols for businesses; to review and standardise investment processes; and to
provide oversight of Environment, Social and Governance (ESG) policy and its
implementation across the group.
6) Corporate social responsibility (CSR): To harmonise the CSR
efforts of the businesses in a focused manner with aligned goals so as to optimise impact
on the beneficiaries.
Let me now take you through the key financial results for FY2025 of the
enterprises that constitute your Company.
With respect to the established companies, in the lending
business -
Bajaj Finance Ltd. (BFL), on consolidated basis surpassed assets
under management (AUM) of Rs 400,000 crore and a customer franchise of over 100 million.
Profit after tax (PAT) grew by 15% to Rs 16,638 crore, delivering a return on average
assets (ROA) of 4.6% and return on average equity (ROE) of 19.2%. The loan provisioning
for the year was higher at Rs 7,966 crore, up from Rs 4,631 crore in FY2024 on account of
model redevelopment, macro-level deterioration, increasing leverage on unsecured loans and
increased AUM.
Bajaj Housing Finance Ltd. (BHFL), a subsidiary of BFL, got listed
on the equity segment of the National Stock Exchange and the Stock Exchange, Mumbai (BSE)
with an IPO of Rs 6,560 crore.
BHFL saw its AUM increase by 26% to Rs 114,684 crore and PAT by 25% to
Rs 2,163 crore.
Bajaj Financial Securities Ltd. (BFSL), again a subsidiary of BFL
providing digital stock broking services ended the year with a customer franchise of
979,000 and PAT growth of 148% to Rs 139 crore.
On the insurance businesses -
Your Company signed Share Purchase Agreements to acquire the 26%
interest owned by Allianz SE in Bajaj Allianz General Insurance Company (BAGIC) and Bajaj
Allianz Life Insurance Company (BALIC).
This will increase the Bajaj group's ownership in BAGIC and BALIC to
100%. The agreed consideration for 26% stake in BAGIC is Rs 13,780 crore and in BALIC it
is Rs 10,400 crore, totalling Rs 24,180 crore. These acquisitions are subject to necessary
regulatory approvals. This Rs believe is one of the largest deals in the financial
services space in the recent times and indicates our commitment to the insurance ventures
and the financial services sector in India.
Coming to Bajaj Allianz General Insurance Company Ltd. (BAGIC), the
Company continues to be the 3rd largest general insurer, measured by gross direct premium,
ahead of three public sector insurers of significantly longer vintage. Gross written
premium (GWP) for FY2025 stood at Rs 21,583 crore with a growth of 5%. Excluding tender
driven business of crop and government health insurance,
BAGIC's growth was 8%. Growth for the industry was impacted by the
change in accounting for long-term products. BAGIC's market share in the industry,
including standalone insurers, was 7.2% in FY2025.
PAT was Rs 1,832 crore with a growth of 18%.
Bajaj Allianz Life Insurance Company Ltd. (BALIC), maintained its
market share at 5.9% on Individual rated new business (IRNB) premium with a growth of 12%.
Gross written premium (GWP) for BALIC increased by 18% to Rs 27,160 crore. The Value of
new business (VNB), which is a measure of profitability of the business written in FY2025,
was Rs 1,152 crore, a growth of 9%. The AUM was at Rs 123,734 crore with a PAT of Rs 508
crore.
Let me now move to the emerging businesses -
Bajaj Finserv Direct Ltd. (BFSD) recorded a revenue of Rs 598 crore
and turned cash positive during the year.
Bajaj Finserv Health Ltd. (Bajaj Finserv Health) recorded a
consolidated revenue of Rs 892 crore and has worked on integrating Vidal Healthcare to
deliver unified services.
Bajaj Finserv Asset Management Ltd. (BFS AMC) achieved an
impressive milestone with an AUM of Rs 20,365 crore as on 31 March 2025, within two years
of start of operations.
Bajaj Finserv, on consolidated basis posted an all-time high
financial performance.
• Consolidated revenue of Rs 133,822 crore.
• Consolidated profit after tax (PAT) of Rs 8,872 crore.
Continuing the strong tradition of giving back, the Bajaj group
announced Bajaj Beyond - an initiative which commits Rs 5,000 crore impacting over
two crore Indians over the next five years, with a focus on skilling.
Let me now touch upon your Company's employability initiative which Rs
closely identify with.
This is the Skillserv Initiative under Bajaj Beyond wherein we
are bringing our expertise of our Industry to create and deliver skilling programmes to
bridge the skill gap. Our flagship offering - CPBFI (Certificate Programme in Banking,
Finance and Insurance) aims to bridge this gap by providing comprehensive skills training
in the BFSI domain. This 120-hour programme seeks to equip the youth with industry
relevant skills. Notably, 68% of participants are first-generation graduates,
predominantly young aspirants from tier 2 or 3 cities, of whom some 61% are women.
CPBFI has trained over 100,000 students since inception and 46,807
students in FY2025 alone, spanning over 161 districts and 23 states in India.
Skillserv has expanded its range of BFSI offerings beyond CPBFI by
piloting new offerings in the space of insurance, gold loans and micro finance. We are
also building our library of digital programmes. Over time we will build an ecosystem of
such offerings, leveraging our expertise and providing the opportunity to skill and
upskill and thereby create economic and social opportunities for our citizens.
This is an important initiative of Bajaj group continuing its focus of
giving back to society.
Thank you as always for your support to BFS. And my thanks to each and
every employee of the group to deliver the kind of results that you see today.
Yours sincerely,
Sanjiv Bajaj
Chairman & Managing Director