Bajaj Auto’s Finance Arm Receives RBI Nod to Start NBFC Services

Bajaj Auto recently announced that its subsidiary, Bajaj Auto Consumer Finance, has obtained regulatory approval from the Reserve Bank, paving the way for its entry into the NBFC (Non-Banking Financial Company) sector.

The company emphasized that it will provide NBFC services without accepting public deposits from consumers. This crucial RBI license was granted on August 31, 2023.

Background

Bajaj Auto, a leading manufacturer of two-wheelers and three-wheelers in India, had applied to the RBI for permission to establish an NBFC business on July 9 of this year.

About Bajaj Auto Consumer Finance

Bajaj Auto Consumer Finance, established in 2021, is a wholly-owned subsidiary of Bajaj Auto, with the parent company holding a 100 percent stake.

The company will exclusively finance products manufactured by Bajaj Finance.

Financial Performance

Bajaj Auto, headquartered in Pune, is one of India’s oldest automotive companies.

The company reported a profit of Rs 1,665 crore in the June quarter, marking a 42 percent increase compared to the same period last year.

Market Performance

On September 1, Bajaj Auto’s shares closed at Rs 4,668, registering a 1.18 percent gain in the stock market.

Over the past six months, the stock has delivered returns exceeding 25 percent and has posted a 30 percent return in 2023.

Industry Trend

Many auto manufacturers are venturing into the NBFC sector to boost vehicle sales.

This approach allows customers to access financing services from the same NBFC associated with the auto company whose products they purchase.

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