Industry Profile: NBFC, or non-banking Finance Company, plays a pivotal role in economies like India. As per definition, they are companies providing certain banking services. As per RBI Definition

  A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 engaged in the business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale/purchase/construction of an immovable property.

In India, they are regulated under RBI  within the framework of the [[Reserve Bank of India Act, 1934]] (Chapter III-B) and the directions issued by it. Therefore, there are significant restrictions on NBFC about Collecting deposits and doing business. There are eight major types of NBFCs in India.

  1. Asset finance company. The company does business in financing physical assets supporting productive or economic work. In simple words, they are companies sponsoring tractors, Vehicles for agriculture lathe machines, cranes, generator sets, earthmoving and material handling equipment, moving on own power, and general-purpose industrial machines.
  2. Investment company: A company like a mutual Fund, a Holding company in some cases, or a Private Equity Company.
  3. Loan Company: The company has a business of giving loans but other than being an Asset finance company. Like Personal loans, Housing Finance companies.
  4. Infrastructure Finance Companies: Companies Financing Infrastructure. Again, RBI kept Strict regulations on them. Infrastructure finance companies deploy a minimum of three-fourths of their assets in infrastructure loans. The net owned funds are more than 300 crores, have a minimum crediting rating of ‘A,’ and the Capital to Risk-Weighted Assets Ratio is 15%. The best example is IDFC, though now they are owned by one bank. They are one Infrastructure finance company. Others are India Infrastructure Finance Company Limited ( IIFCL), Infrastructure Finance corporation of India (IFCI), and Power Finance Corporation (PFC )
  5. Infrastructure Debt Fund Non-Banking Finance Company aka IDF – NBFC: If you are unaware of it, they exist. India Infra Fund is the best example managed by IDFC. IDF-NBFC is a company registered as NBFC to facilitate the flow of long-term debt into infrastructure projects. IDF-NBFC raises resources through Multiple-Currency bonds of minimum 5-year maturity. Only Infrastructure Finance Companies (IFC) can sponsor IDF-NBFCs.
  6. NBFC FACTORS: One another significant type of NBFC in India. Factoring is a type of working capital financing. SBI Factor and Canara factor are some examples.
  7. Gold Loan NBFC: You can’t ignore this type in India. Over the years, gold loan NBFCs witnessed an upsurge in the Indian financial market, owing mainly to the recent period of appreciation in the gold price and consequent increase in the demand for the gold loans by all sections of society, especially the poor and middle-class to make ends meet. Though many NBFCs are offering gold loans in India, about 95 percent of the gold loan business is handled by three Kerala-based companies, Muthoot Finance, Manapuram Finance, and Muthoot Fincorp. Growth of gold loan NBFCs eventuating from various factors, including Asset Under Management (AUM), number of branches, and also the number of customers, etc.
  8. Residuary Non-Banking Finance Company: All famous for Sahara case as it is a company and has as its principal business the receiving of deposits, under any scheme or arrangement or in any other manner and not being an Investment, Asset Financing, Loan Company. So you can do so many businesses. Nowadays, there are not many of them, and they may be restricted from existing. They were the main accused in many Frauds.

Company Profile:  The company is part of Bajaj Group and has been a subsidiary since 2010. The company deals in Consumer Finance, SME and Commercial Lending, and Wealth Management. The company has a diverse portfolio of products as the company is attached to Automobile companies. Today the company is giving loans for AC, refrigerators, LED, and Washing Machines under durable. Under Lifestyle loans, the company keeps tie-ups for Pre-approved loans like Home town, home center, @ home, houseful, Godrej interior,r, etc. The company also give loan for mobile and other electronic appliances with which an EMI card is also available. The company is well known for its SME loan in which it offers loans against property and loans for business. one other product is a loan for E-commerce sellers loan as well as e-commerce consumer finance. The company also lends for two-wheelers and three-wheelers. As a subsidiary of Bajaj Finserve, it is also distributing insurance and accepts fixed deposits, wholesale and retail.

Shareholding Pattern:  BSE Data

Financials and Ratio :  [table id=81 /]

Future prospectus:  NBFC is the fastest-growing company with a big brand name. Well-known among customers and investors. Having an extensive product range, the company keeps potential for immense growth as SMEs and small finance are rising star in finance. Funding is not a problem when your parent is Bajaj.