The Hindu Business Line : Bajaj Finserv to set up asset management, distribution co

Mumbai, May 22 Bajaj Finserv, the financial services company of the Bajaj Group, is now looking at setting up an asset management company. The company is in talks with several foreign partners for the new venture.

“We will take a call by October on whether we get into it alone or with a partner. We want to create companies that offer the complete gamut of products and services required during the financial life cycle of a customer,” Mr Sanjiv Bajaj, Managing Director, Bajaj Finserv, said.

Bajaj Finserv functions as the holding company of its insurance (Bajaj Allianz Life and Bajaj Allianz General), consumer finance (Bajaj Auto Finance) and windmill businesses. The company will be listed on the Bombay Stock Exchange on Monday.

Bajaj Finserv will also create another company specifically for distributing its products. The new distribution company will work as a broker or a corporate agency to distribute all the financial products coming from Bajaj as well as third-party products, Mr Bajaj said.

The demerged entity, headed by the younger Bajaj scion, has received the requisite clearances from the Securities and Exchange Board of India for listing Bajaj Finserv.

“The listing will help us raise capital for the future needs of the insurance companies. It will also bring clarity on the value of the businesses,” Mr Bajaj said.

In 2007-08, Bajaj Finserv has reported consolidated revenues of Rs 12,230 crore and a net loss of Rs 32.7 crore. There are no comparable figures for the previous year since the company was formed in May last year.

Mr Bajaj indicated that there were no immediate plans to list the insurance companies. Bajaj Finserv is also adopting a new strategy for its listed consumer finance division, Bajaj Auto Finance. Currently, around two-thirds of the business comes from auto finance while the rest comes from loans for consumer durables.

Mr Bajaj said the company now plans to reverse the proportion. The company has seen a rise in its non-performing assets. It now plans to increase its business from loans to durables such as personal computers, laptops, loans against shares, personal loans for the self-employed as well as loans against property.

In 2007-08, Bajaj Auto Finance reported a net profit of Rs 20.1 crore, against Rs 47.2 crore). “The business has been less profitable because we have seen a sharp increase in our operational costs,” Mr Bajaj said.

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