Having registered a growth of 7 percent year-on-year in AUM during the June quarter, Bajaj Finance is likely to build its assets under management by 10-12 percent in the current financial year.
From 27.1 percent of Aum as of 30 April 2020, the moratorium book was reduced to 15.7 percent of AUM as of 30 June 2020. However, according to Rajeev Jain, Managing Director, Bajaj Finance, as against earlier estimates of 80-90% increase in FY21, the company expects credit cost to increase by 100-110 percent. Moreover, Bajaj Finance has also been focusing on flexible loan products amid Covid-19 crisis.
While during a conference call, the company’s management has also stated that 75 cities would be getting back to pre-Covid-19 state by October this year.
Rajeev Jain also said, “Given the lockdown, the company decided to convert some of its existing customers with no overdue and good repayment track record from term loan to a flexi loan for a switch fee. It also has an added feature of only interest servicing for the first 1-2 years.”
Providing the needed flexibility for customers to drawdown in the times of need and prepay when they actually want, digitally. They have converted 8,600 crore of term loans into flexi loans in the June quarter, which stood at 36,846 crore as of March 31st in the existing book.
“The company has revised its margin profile in certain businesses to protect its overall profitability. On mortgage business, the company is facing significant pricing pressure and is repivoting its mix marginally for short to medium term,” he added.
While if we talk about Bajaj Finserv, it has reported a 44 percent rise in consolidated net profit of Rs 1, 215 crore for the June 2020 quarter. Its consolidated income increased by 16 percent to hit Rs 14,192 crore.