It is good to see, these hugely loss making organizations are giving credit. 100% sure, things will be worse for these organizations but will help expand the market
Just curious…Can RBI come down on these credit lending stuff tomorrow ? Regulatory risks…
Also we need keep in mind that business will go to those who lends at lower rates. Brand name doesn’t matter to someone who takes loan, only rate of interest matters. Bajaj Finance has wonderfully captured the consumer loan segment when no other business house focused at this space. Now with Bajaj Finance success focus is getting attracted towards this segment. HDFC with HBD etc.
It’s my understanding that Bajaj Finance can’t compete on lending rates with the likes of Walmart and Amazons as they will always have lower cost of capital. We will need to see how Bajaj Finance keep growing at such rate giving intense competition.
Also remember core business of Amazon or Walmart is not lending. Pretty soon they will start staring at losses. Same thing happened in HFC space. People like Anil Ambani has jumped into the fray. But your Gruh and HDFCs are rock steady.Competition may come-so what? India is a huge market. Same analogy could be said about private banking space
NBFC stocks are slightly under the weather now because the interest rate cycle is seen to be inching up.
However, this weakness is the ideal opportunity for us to dive into these stocks, Vinit Sambre opined.
“ We get excited looking at the long-term trends and given the opportunity size, we have backed them up, ” he said with a sparkle in his eyes.
“ The opportunity is still very wide and the interest rate cycle will keep having its own cycles. It is sometimes high and sometimes low, but these NBFCs have displayed strength during the last 10 years and have also maintained their asset quality quite well, ” he added.
A few days ago, Ramesh Damani rapped us on the knuckles for our itch to “ book profits ”.
“ If you really want to make money you have to invest in a business for long periods of time … Great businesses are built of great value over a long period of time. They keep compounding, ” he said.
“ Great ideas are very rare and if you get a good idea you need to hold on to those great ideas see them flower into great businesses over period of time, ” he emphasized.
However, the baffling aspect is that the temptation to book profits is not confined to novices. Even expert investors with deep understanding of business fundamentals succumb to the temptation.
In his latest interview, Sumeet Nagar of Malabar Investments candidly confessed that he committed the cardinal mistake of prematurely dumping two mega-bagger stocks, namely, Page Industries and Bajaj Finance .
The reason he dumped the two stocks is because he thought they were “ overvalued ”.
Today, it seems laughable that anyone could regard powerhouses like Page Industry and Bajaj Finance to be overvalued given that they have just started on their multibagger journey.
Thankfully, Summet Nagar realized his mistake before further damage was done.
He dived back into both stocks without wasting a minute.
“ Once we realised that mistake, we got back in. It was a mistake to get out early ,” he said with a sheepish smile.
Needless to say, the decision was very sensible indeed because Page Industries has now blossomed into a magnificent 100-bagger.
Can anybody let me know how to check bajaj fin live bond yield?
What is Amazon’s and Walmart’s cost of capital in INR? Can you provide a reference?
Walmart investment in Flipkart. Both Flipkart and Amazon are likely to enter consumer credit business to enlarge their ecosystem.
In the US: Walmart does not have any consumer credit card. Amazon does have a store branded card (co-branded with Sync Bank - provides EMI) and a credit card (co-branded with Chase). Amazon provides a 5% cash back with the store card if paid in full (i.e. no EMI) and 5% cash back with the Credit card without EMI. Yes, they could repeat this in India, but won’t they partner with a financial institution? What are your thoughts?
How much of Bajaj Finance’s book is for financing purchases via Flipkart and Amazon?
Many big ticket appliances are still purchased from stores, even in the US. Maybe that’s where majority of the people use EMIs?
Amazon and Walmart are not in consumer credit business in the US. Walmart for decades at that. Don’t see why they would enter a risky lending business in India. Remember, the NPA levels in India are much higher than in the US. In India it is 10% on average and in the US it is around 1% -https://data.worldbank.org/indicator/fb.ast.nper.zs. I don’t know how the world bank calculates it. Even if we consider a margin of error, the difference is huge.
All the major retail operators in US usually have a tie up with one/more lenders, that way they focus on core business and consumer credit risk is taken care by lenders. There is different segment of Auto loans which is mainly covered by a lending entity of Automobile company itself (Eg. Ford Credit etc).
I agree that consumer lending is high risk business and due to low ticket size and to provide ease of credit, lenders usually do not involve rigorous process around checking the credit history or paying capacity of individuals.
In my opinion, Amazon or any other retail franchise usually provide the credit facility to tap the consumers who don not have money to pay upfront or who do not want to pay upfront with a focus to increase their sales. So, that way they share the some of their profit from the sale with the lending to compensate the interest payments. These shouldn’t be considered as competition to lending business itself.
Bajaj Fin raised capital on 7.9% yield from market… So why there is so much concern? Everything seems ok.
I think 7.9% is the coupon rate. The bond was traded at a yield of 9.35%. Correct me if i am mistaken.
Is it not a normal scenario ? It happened earlier also in July month. 1-1.5% spike in trade is not a big deal .It is not going to be settled now because maturity will be on sept 19.
Can you please tell where to check the date of issue of the bond. On BSE i can find only the date of redemption. Thanks.
Good news for better managed NBFC’s like Bajaj Finance
My read of this whole NBFC fiasco- in the short term, I am expecting liquidity is going to dry up a bit for NBFCs and COF for all NBFCs is going to rise. And this is where, men will be separated from boys. Toughest (with diverse borrowing sources, strong balance sheets and low delinquencies) gonna survive this roller coaster ride. But definitely, in the short term expecting to see a drop in NIMs for most of the players. Hope to add more of BFL, as and when it corrects in future. I may be wrong in my analysis. I hold BFL and this is not a buy/sell reco.
She must be investigated for mainstreaming the rumours on the CNBC platform. I have seen her tweeting misleading data and info quite often. This time she seems to be on a mission to prove something. Asking leading questions to the panelists etc. when the fund managers are themselves saying this is 1-2 week liquidity issue. So called flaw in the business model of NBFCs was there earlier too. Has anyone done a show to highlight the same?
