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Bajaj Finserv
Our verdict on Bajaj Finserv isn’t the consensus take — see where we landed, and the one risk the bull case glosses over.
See the verdict — free →Does management do what it says?
The transaction has been finalized following regulatory approvals, resulting in the termination of joint venture agreements with Allianz SE.
“The existing joint venture agreements between the two insurance subsidiaries and Allianz SE are terminated.”
The company successfully completed the acquisition of the 23% equity stake held by Allianz SE in both Bajaj General Insurance and Bajaj Life Insurance on 8 January 2026.
“On 8 January 2026, Bajaj Finserv Limited (BFS) along with its Promoter Group entities, namely Bajaj Holdings & Investment Limited and Jamnalal Sons Private Limited, successfully completed the acquisition of 23% equity stake held by Allianz SE in the two insurance subsidiaries namely Bajaj General Insurance Limited and Bajaj Life Insurance Limited.”
See the full cited Management analysis of Bajaj Finserv
How durable is the business?
Bajaj Finance continues to be the primary growth engine with a 26% increase in Assets Under Management (AUM) and a 17% growth in profit, maintaining a stable ROE of nearly 19%. (6 expanding, 4 shifted across 3 engines)
“The Company's diversified business model has enabled it to record a strong AUM growth of 26% at Rs.4,16,661 crores as of 31st March '25 as compared to Rs.3,30,615 crores as of 31st March '24.”
The group maintains a massive capital buffer, with estimated excess capital available increasing to ₹48,950 Crore as of March 2025, up from ₹31,457 Crore in 2021. Solvency margins across all insurance and lending arms remain significantly above regulatory minimums. (4 expanding, 1 stable across 3 engines)
“Estimated excess capital available 17,403 8,442 3,831 1,781 31,457... Estimated excess capital available 27,021 6,681 5,953 9,295 48,950”
See the full cited Business Model analysis of Bajaj Finserv
Where does growth come from?
The AMC business is in a 'New Trend' phase of rapid scaling, crossing the ₹20,000 crore mark in less than two years. (1 new trend, 2 accelerating across 3 signals)
“We believe the Bajaj Finserv AMC is the fastest to cross the Rs.20,000 crores mark in less than two full years of operations.”
Customer acquisition is accelerating, with new loans booked increasing from 80 lakh to over 1 crore in the same quarter year-on-year. (9 accelerating, 1 steady across 10 signals)
“The number of new loans booked in Quarter 4 was up 36% to over Rs.1 crore as against Rs.80 lakh in the same period last year.”
See the full cited Future Growth analysis of Bajaj Finserv
What could break the thesis?
The risk remains active as the company is contesting a demand order of ₹ 191.44 crore (including penalty) related to incorrect availment of input tax credit (ITC).
“During the year ended 31 March 2025, BALIC has received a demand order amounting to ₹ 191.44 crore (including penalty of ₹ 143.58 crore) in respect of availment of certain input tax credit (‘ITC’) by BALIC.”
The risk is intensifying as loan provisioning for FY2025 rose to ₹ 7,966 crore from ₹ 4,631 crore in FY2024, driven by macro-level deterioration and increasing leverage on unsecured loans.
“The loan provisioning for the year was higher at ₹ 7,966 crore, up from ₹ 4,631 crore in FY2024 on account of model redevelopment, macro-level deterioration, increasing leverage on unsecured loans and increased AUM.”
See the full cited Risk analysis of Bajaj Finserv
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