Moody's assigns first-time Baa3 ratings to Bajaj Finance

Global rating agency Moody's has assigned a first-time Baa3 rating indicating investment grade to Bajaj Finance Ltd (BFL) with stable outlook. The company's ratings consider its strong and entrenched franchise as the largest retail oriented NBFC in India with a sizable customer base and distribution network; its diversified loan book, which supports its high risk-adjusted profitability; its capitalization; and its competitive funding costs, BFL said quoting Moody's statement.

BFL will likely continue gaining market share and further augmenting its already sizable franchise with consolidated assets under management of Rs 3.5 trillion ($42 billion) as of June 2024, it said.

BFL's strong loan diversification gives it flexibility to calibrate loan growth depending on the prevailing asset quality trends in the respective segments, it said, adding, the diversification also helps in asset-liability management via a judicious mix of short- and long-term loan assets.

Although BFL's sizable unsecured lending exposes it to economic shocks, it said, the company has employed various risk management processes to ensure adequate risk adjusted returns.