Bajaj Finance’s strong digital move made it bigger than home loans giant HDFC

• Bajaj Finance’s market cap overtakes that of HDFC, one of the largest home financing companies.
• With this, Bajaj Finance is now the eighth largest company on the exchanges in terms of market cap.
• The market capitalisation of the NBFC became ₹4.18 lakh crore more than that of HDFC at ₹4.17 lakh crore.

Pune-based financial services company, Bajaj Finance, has now become the eighth largest company in the Indian market in terms of market capitalisation, even surpassing home financier major Housing Development Finance Corporation.

Bajaj Finance is putting its best efforts to grow a digital community for its lending and credit business. It has now brought all its offerings under one app and has also done away with more physical credit cards. The app allows customers to secure loans, repay, get EMI cards, track their FDs, house insurance, investments etc.

For future growth, the company is expecting investments from global giants for capital and technology partnerships. Bajaj Finance is also eyeing a banking license with its huge loan book.

“We expect the digital transformation to start bearing fruit in terms of better cross-sell from the second half of FY23,'' said a Bernstein Research report.

In fact, analysts believe the depth of offerings on the BAF app are in line or even better than apps of the large private sector banks. This offers Bajaj Finance a new lever for customer acquisition, engagement, and cross-sell.

The market capitalisation of Bajaj Finance became ₹4.18 lakh crore more than that of HDFC at ₹4.17 lakh crore.

Shares of Bajaj Finance surged more than 2% today as market momentum picked up slightly after a stressful day on February 14.

India top ten biggest companies listed on the stock exchange
Later, shares of Bajaj Finance came down slightly and at par with HDFC.

On the other hand, home finance company HDFC is also doing well with strong demand but with multi-year low home loan rates. Adding to it, shares of other listed group companies have been underperforming the market for a long time now.
Shares of the company will rise more as the core business i.e. home lending has got potential and is well on track to get transformed into an adaptable new age fin-tech, said analysts at ICICI direct. The brokerage firm expects the price to rise by 37% to ₹9,500 per share.
High return ratios, superior asset quality, high growth rates, which bounced back very fast post lockdowns and digital initiatives will keep multiples of Bajaj Finance well above best-in-class banks (like HDFC Bank, Kotak Mahindra) and be at par with companies like SBI Cards, said analysts at Axis Capital.

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