Mumbai: Sanjiv Bajaj, the young scion entrusted with the Bajaj group’s financial services business, Bajaj Finserv Ltd, was expected to have a smoother ride than his brother Rajiv, who heads the automobile business. When the group split into three entities early in fiscal 2009, Bajaj Auto Ltd was already facing stiff competition from Hero Honda Motors Ltd, the country’s largest two-wheeler maker, and Honda Motorcycle and Scooter India. Pvt. Ltd. Life and general insurance as well as the group’s consumer finance business went to the finance arm, but the sector soon hit a speed bump. Sanjiv isn’t perturbed. “This is a great time to look at new businesses,” he says. The firm plans to explore the construction finance and credit card distribution businesses over the next six months. Edited excerpts:
Unperturbed: Bajaj says this slowdown has not affected his firm from a size and opportunity point of view.
Have the current slowdown and global concerns about non-banking finance companies (NBFCs) slowed growth at Bajaj Finserv?
We have a few mantras to tackle the slowdown. First is to focus on growing profitable business lines. An opportunity like this allows you to pick and choose. For instance, in our general life insurance business we focused mainly on retail businesses—motor car and health. We are building on that.
What are the other mantras?
We believe it is a great time to find new businesses. After two to three years when India comes out of the slowdown, we will be the first to go on the upswing.
We are fortunate that while we were looking at new businesses, we took our own time to take a decision to enter these segments—asset management, financial products and financial advisory business. A lot of people have sunk a lot of money in new businesses. We can learn from others’ mistakes.
What are these new businesses?
Construction finance and credit card distribution are two new line of businesses that we will explore in the next six months.
These are still at an exploratory stage. This year we did insurance, insurance distribution and loans against property. Now, we are evaluating new lines of businesses.
And your proposed asset management business?
We are getting offers. But unless we don’t get the right price, we will not do (float) it. Right now, we are in discussion with Sebi (Securities and Exchange Board of India) for detail licensing. It will take at least 9-12 months. By that time, India will come out of the current slowdown.
Would you set up a bank if the Reserve Bank of India opens the option for corporate houses?
Yes, we would look at it. Very clearly.
But Bajaj Finserv still has a conservative approach.