Bajaj Finserv and Bajaj Finance, integral to the Bajaj Group, offer distinct services and operate in complementary yet separate spheres of the financial market. Bajaj Finserv serves as a holding company with a diverse portfolio that includes insurance, lending, and asset management, while Bajaj Finance focuses primarily on consumer lending and financial services. This article aims to explore the key differentiators between these two firms from an equity investment perspective, considering their business models, market positions, and growth trajectories, thereby providing a clearer understanding for potential investors.

The Bajaj Group is one of the most sought-after and known names in the Indian business spectrum. As it is one of the most diversified conglomerates in India, you must have come across its products or services sometime in your life. However, its finance segment is one of its most significant contributors to its overall growth in each quarter. Within the finance segments, individuals come across two names: Bajaj Finserv and Bajaj Finance. Are they the same? Or if they aren’t, how do they differ?

This blog will help you understand Bajaj Finance and Bajaj Finserv’s differences to better use their products and services.

Bajaj Finserv is a leading unregistered Core Investment company (CIC), as per the Core Investment Companies (RBI) Direction, 2016. It is a subsidiary of the Bajaj Group that focuses on investments, loans, insurance, and savings products.
 

Technology-driven growth

Technology plays a vital role in the business operations of Bajaj Finserv as it invests heavily in finding technology-driven solutions for its 35.5 million users. Furthermore, Bajaj Finserv has extensively developed its technological infrastructure to ensure it has a robust ecosystem to accommodate medium-term traffic of up to one billion. The web platform of Bajaj Finserv has witnessed tremendous growth and reached a staggering 219 million customer visits. In 2023, Bajaj Finserv disbursed loans exceeding Rs. 5,000 crores.

Financial performance highlights

As of March 2024, Bajaj Finserv's revenue was Rs. 31,83,000 crores, which improved by 35.59% year-on-year. Net income also improved by 19.76% to reach Rs. 2,12,000 crores, with the operating income increasing to Rs. 10,66.000 cores, up 33.73%. Over the 16-year period, it has created a network of 1,20,000 doctors and 6,000 lab technicians with a collaboration of 1,800 hospitals.

Focus on innovation and stakeholder holdings

Bajaj Finserv leads in the financial segments and operates its business to focus
on innovation and stakeholder holdings. It has a 52.49% shareholding in Bajaj Finance Limited, which helps employ various banking structures and technologies. Furthermore, it also has stakes in other subsidiaries, such as the Bajaj Allianz General Insurance Company and Bajaj Allianz Life Insurance Company. Bajaj Finserv also oversees and supervises other Bajaj Group subsidiaries, such as Bajaj Financial Securities and Bajaj Housing Finance.

Bajaj Finserv subsidiaries

Here are Bajaj Finserv subsidiaries:

• Bajaj Finserv Health Ltd.
• Bajaj Finserv Ventures Ltd.
• Bajaj Finserv Asset Management Ltd.
• Bajaj Finserv Mutual Fund Trustee Ltd.

Read more: What is SGX Nifty

Bajaj Finance Ltd. is a leading non-banking financial company (NBFC) in India, part of the Bajaj Group. Established in 1987, it offers a broad spectrum of financial products and services to both retail and corporate customers. It has an extensive customer base of 69.14 million.

Financial highlights

As of July 2024, the consolidated profit before tax grew by 20% to Rs. 5,105 crore, and the Consolidated profit after tax grew by 21% to Rs. 3,825 crore. Bajaj Finance delivered an ROA of 4.84% as against 5.40% in Q4 FY23. Furthermore, it delivered an annualised ROE of 20.48% as against 23.94% in Q4 FY23. The AUM of Bajaj Finance also increased by 34% to reach Rs. 3,30,615 crore as opposed to Rs. 2,47,379 crore as of 31 March 2023, and the company added 3.23 million new customers to the franchise.

Products and services

Bajaj Finance Ltd. offers a comprehensive range of financial products and services designed to meet the diverse needs of its customers. The company's offerings are structured to address various aspects of personal and business finance. Some segments include consumer finance products, commercial lending and financial institutions, corporate finance and investment products and services.

Consumer finance products

Here are some of the consumer finance products offered by Bajaj Finance:

• Durable finance
• Lifestyle finance
• Gold loan
• Personal loan
• Home loan
• Fixed deposit
• Credit pass
• Loan against FD
• Retail EMI

Commercial lending and financial institutions

Here are some of the commercial lending and financial institutions offered by Bajaj Finance:

• Vendor financing
• Light engineering finance
• Large-value lease rental discounting
• Loans against securities

Corporate finance and investment 

Here are some of the Corporate finance and investment offered by Bajaj Finance:

• Warehouse loans up to Rs. 30 lakh without collateral
• Mutual funds
• Other investment options

Bajaj Finserv and Bajaj Finance are India's leading financial products and services providers. The choice between the two entirely depends on your need for financial products or services, financial goals, personal preferences, and financial situation. When it comes to choosing between the stocks of Bajaj Finserv and Bajaj Finance, you can invest in Bajaj Finserv if your goal is to earn stable and less volatile returns. As Bajaj Finserv offers a host of financial services such as retail financing, investment management, insurance, etc, it can be an investment option for investors with a lower risk tolerance.

On the other hand, you can choose Bajaj Finance as an investment option if you want to earn good returns through a high-growth investment option. Bajaj Finance offers a more specialised portfolio of financial products and services, which can benefit investors who can take a slightly higher risk for better returns.

Bajaj Group is a diversified group that includes a host of specialised companies. For its finance segment, it has two of the most well-known companies, Bajaj Finserv and Bajaj Finance. Although the products and services are somewhat the same, the companies are different in their management and operations, making it important to understand Bajaj Finance vs. Bajaj Finserv comparisons. Now that you know Bajaj Finance and Bajaj Finserv’s differences, you can better utilise the products and services of both companies.