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Compare Bajaj Finance with other non-banking finance companies (NBFCs) on a like-for-like scorecard, not on asset size alone. Start by matching business model and Reserve Bank of India (RBI) regulatory layer. Then compare growth, profitability, asset quality, credit cost, capital, funding, efficiency, concentration and valuation. Borrowers should use a different test: annual percentage rate (APR), fees, collateral, tenor, service and prepayment rules. “Better” depends on whether you are buying a stock, assessing credit risk or choosing a loan.
What makes an NBFC comparison fair?
NBFCs lend to very different customers. A diversified lender may combine consumer-durable finance, personal loans, MSME credit, commercial lending, rural loans, deposits and partner-distributed products. Another company may focus mainly on housing, vehicles, gold, microfinance or infrastructure. Comparing the first company’s total assets under management (AUM) with the specialist’s AUM can therefore produce a misleading ranking.
Use the same reporting period and the same basis—standalone or consolidated—for every company. Record whether a number is an opening balance, an average, a year-end figure, a flow such as disbursements, or a ratio. A practical comparison has three passes:
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- Score operations: compare growth, earnings, asset quality, capital, funding, efficiency and concentration.
- Apply the result to your decision: investor returns, borrower cost and credit-risk resilience require different weights.
Bajaj Finance vs other NBFCs: the FY2024-25 baseline
Bajaj Finance’s FY2024-25 annual report provides a detailed reference point. These are company-reported figures for the year ended March 2025; they should not be treated as directly comparable with a peer’s number until the peer’s period, accounting basis and definitions are matched.
#1 Best Overall
| Measure | Bajaj Finance FY2024-25 | How to use it in a peer comparison |
|---|---|---|
| AUM | ₹416,661 crore | Compare only with a peer’s equivalent lending AUM and segment mix. |
| AUM growth | 26%, from ₹330,615 crore in FY2023-24 | Check whether growth came from existing customers, acquisitions, new products or riskier segments. |
| Profit after tax | ₹16,779 crore, up 16% | Match the same period and standalone/consolidated basis. |
| Return on average assets (ROA) | 4.57% | High ROA is meaningful only alongside credit cost, leverage and product risk. |
| Return on average equity (ROE) | 19.19% | Read with capital adequacy and valuation; leverage can lift ROE. |
| Gross NPA | 0.96% | Compare definitions, write-offs, seasoning and portfolio composition. |
| Net NPA | 0.44% | Read with provisioning coverage and the amount already written off. |
| CRAR | 21.93% | Compare with each peer’s regulatory minimum, Tier-I mix and growth needs. |
| Tier-I adequacy | 21.09% | Indicates the equity-like capital buffer under the reported framework. |
| New loans booked | 43.42 million | Use with repeat-customer share, ticket size and acquisition cost. |
| Customer franchise | 101.82 million | Check active customers, definition and overlap across products. |
| Loan-loss provisions | ₹7,966 crore, versus ₹4,631 crore in FY2023-24 | Test whether low reported NPAs are accompanied by rising expected-loss recognition. |
In its FY2025 chairman’s letter, Bajaj Finance said AUM increased from ₹330,615 crore to ₹416,661 crore, a 26% increase. The same letter reported FY2025 loan-loss provisions of ₹7,966 crore, 72% above ₹4,631 crore in FY2024. The provision movement is a reason to examine credit cost and portfolio seasoning rather than relying on the 0.96% gross NPA ratio in isolation.
Regulatory layer: compare like with like
RBI’s Scale-Based Regulation framework places NBFCs in Base, Middle, Upper and Top layers. The ten largest eligible NBFCs by asset size are always placed in the Upper Layer; the Top Layer is reserved for an NBFC designated for specific systemic risk. Upper-Layer companies face enhanced prudential, governance and disclosure expectations.
RBI’s 2024-25 Upper-Layer list identifies Bajaj Finance and Shriram Finance as deposit-taking NBFC investment and credit companies (NBFC-ICCs), LIC Housing Finance as a deposit-taking housing finance company (HFC), and Cholamandalam Investment and Finance as a non-deposit-taking NBFC-ICC. This is a useful starting peer set, not proof that the businesses have identical risk.
- Deposit-taking status: deposits can diversify funding but bring obligations around liquidity, interest rates and depositor protection rules.
- NBFC-ICC versus HFC: a housing lender’s collateral, tenor and asset-liability profile differ from a consumer lender’s unsecured receivables.
- Layer changes: use the classification applicable to the reporting date; RBI designations and regulations can change.
For every candidate peer, record the RBI category, deposit status, consolidated entities and principal products before collecting ratios.
Business mix and customer segments
Build a segment map before comparing scale. At minimum, separate consumer durable and personal lending, MSME, commercial, rural, housing, vehicle, gold and microfinance exposure. Note secured versus unsecured loans, average ticket, tenor, geography and whether loans are originated directly or through partners.
Rank #2
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Bajaj Finance’s mix
Bajaj Finance reports consumer, MSME, commercial and rural lending, alongside deposits and partner-led financial products. Its broad franchise means its AUM is not a single-risk pool. A peer with a smaller total book may have a stronger position in one niche, while a peer with a similar AUM may have materially different collateral and borrower behavior.
Questions to ask of every peer
- What percentage of AUM is secured, unsecured, retail, wholesale and co-lent?
- How concentrated are borrowers, dealers, developers, employers, states and products?
- What is the average ticket and tenor in each segment?
- Are new disbursements growing faster than collections or customer income?
- Does the company retain loans, securitize them or originate for another institution?
Scale and growth: quality matters more than speed
Collect year-end AUM, average AUM, disbursements, active customers, new loans booked and branch or digital reach. Then explain the source of growth. Organic growth from existing customers has a different risk profile from an acquisition, a new geography, a new partner channel or rapid expansion in unsecured credit.
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Growth should be tested against funding capacity, capital consumption, operating expenses and early delinquencies. A lender that grows faster than its capital or collections infrastructure may need equity, more expensive borrowing or tighter underwriting later. Conversely, slower growth can reflect deliberate exits from stressed segments rather than weak execution.
Distribution and repeat use
Compare branch count, app and digital acquisition, repeat-customer share, cost per loan, employee productivity and collection infrastructure. Bajaj Finance reports 4,263 locations and substantial app usage, so digital scale is part of its operating model. Do not assume that a large customer-franchise number equals active, profitable borrowers: request the company’s definition and deduplicate customers who hold several products.
Profitability: Bajaj Finance ROA and ROE in context
A useful earnings bridge is net interest income plus fee income, less operating expenses, producing pre-impairment profit; then subtract provisions and taxes. Compare net interest margin (NIM), fee income, operating-expense-to-income, pre-impairment profit, credit cost, ROA and ROE together.
Rank #3
- NIM: a high margin can compensate for operating cost, but may also signal higher-risk borrowers or unsecured products.
- Fee income: check whether fees are recurring, linked to distribution, or dependent on one-off transactions.
- Operating efficiency: compare expense-to-income and cost per account at similar growth rates.
- ROA: reflects earnings on the lending asset base and is useful across differently leveraged lenders.
- ROE: reflects shareholder returns but is affected by leverage, capital levels and any equity issuance.
Bajaj Finance’s FY2024-25 ROA was 4.57% and ROE was 19.19%. A peer’s ratio should be placed beside its credit cost, capital adequacy and business mix, not ranked by the percentage alone. For investors, also calculate growth-adjusted valuation and ask how much of the operating quality is already reflected in the share price.
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How to compare NBFC asset quality
Start with gross NPA (GNPA) and net NPA (NNPA), then add write-offs, provisions, credit cost and provisioning coverage. Confirm whether ratios are based on an end-period denominator, whether loans are 90-days-past-due under the same rule, and whether written-off accounts remain in the disclosed book.
| Asset-quality check | Why it matters |
|---|---|
| GNPA and NNPA | Show delinquent stock before and after provisions, but can lag new stress. |
| Stage-2 or early delinquencies | Reveal deterioration before an account becomes NPA, where disclosed. |
| Write-offs and recoveries | Explain whether reported NPAs are reduced through charge-offs. |
| Provisioning and credit cost | Show the earnings cost of expected and realized losses. |
| Provisioning coverage | Indicates how much of reported NPA exposure is covered by provisions. |
| Portfolio seasoning | A young, rapidly growing book may not yet have passed through a full credit cycle. |
Bajaj Finance reported 0.96% GNPA and 0.44% NNPA for FY2024-25, while provisions rose to ₹7,966 crore. The correct interpretation is not that the NPA ratio is wrong; it is that the ratio needs the provision trend, vintage performance and segment-level data beside it.
Stress-test unsecured consumer exposure
Separate unsecured consumer loans from secured MSME, vehicle or housing loans. Examine borrower overlap, bureau indebtedness, income verification, first-payment defaults, roll rates and collection outcomes. Stress a higher unemployment or income-shock scenario and estimate the effect on provisions, capital and ROE. A lender with low current NPAs can still have high future sensitivity if recent growth is concentrated in a newly originated, unsecured segment.
Capital, funding and liquidity
Compare total capital adequacy (CRAR), Tier-I or CET1, leverage, deposit share, bank borrowing, non-convertible debentures, commercial paper, external commercial borrowings, securitisation and liquidity reserves. Map maturities of assets and liabilities to identify refinancing and duration mismatches.
RBI requires Upper-Layer NBFCs to maintain at least 9% CET1 of risk-weighted assets. A company far above the minimum has more room to absorb losses and fund growth, but excess capital can also depress ROE if it is not deployed productively. Bajaj Finance reported CRAR of 21.93% and Tier-I adequacy of 21.09% for FY2024-25; compare a peer’s figures with the applicable rule and reporting date.
Funding questions
- How much funding matures within 12 months, and what liquid assets cover it?
- What proportion comes from deposits, banks, bonds, commercial paper and overseas sources?
- How would a credit-rating downgrade affect spreads or market access?
- Are asset and liability interest rates fixed or floating, and how quickly can they reset?
- Does securitisation transfer meaningful risk or mainly provide temporary liquidity?
Concentration, governance and downside risk
Read the notes to accounts for product, geography, borrower, developer, dealer and funding concentration. Identify related-party transactions, incentive structures, auditor qualifications, board independence, risk-committee experience and changes in senior risk leadership. Governance is not a soft extra: weak controls can turn a manageable portfolio problem into a capital event.
Check whether growth depends on a small number of digital platforms, dealers, employers, co-lending partners or wholesale borrowers. A diversified AUM headline does not eliminate concentration if many products depend on the same customer income, geography or funding market.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Which NBFC is better for an investor?
There is no universal winner. Construct a weighted scorecard whose weights reflect your objective:
| Investor question | Evidence to collect | Warning sign |
|---|---|---|
| Can it grow safely? | AUM and disbursement growth by segment, capital consumed, customer quality | Rapid growth with weak capital or immature vintages |
| Is growth profitable? | NIM, fees, expense ratio, pre-impairment profit, ROA and ROE | ROE rising only because leverage increased |
| Can it absorb losses? | GNPA, NNPA, provisions, credit cost, coverage and CET1 | Low NPA with rising provisions, large write-offs or thin coverage |
| Can it fund itself? | Liquidity, maturity gaps, deposit mix, ratings and borrowing costs | Heavy short-term refinancing or concentrated lenders |
| Is the price reasonable? | Price-to-book, P/E, growth-adjusted valuation and dilution | Premium valuation that assumes flawless execution |
Use the latest audited filing for each peer before assigning a rank. The available Bajaj Finance figures do not establish a synchronized FY2025 metric table for every NBFC, so a definitive “best NBFC stock” ranking would be unsupported without collecting those filings.
Best Value
How borrowers should compare Bajaj Finance with another lender
A company’s ROA or ROE is not a borrower benefit. Request written terms for the exact loan and compare the total cost, not just the advertised interest rate.
- Calculate APR or total repayment: include interest, processing, documentation, insurance bundled into the loan and taxes.
- Check the rate type: confirm fixed or floating, reset dates and the benchmark or spread if applicable.
- Compare tenor and instalment: a longer tenor lowers the monthly payment but generally increases total interest.
- List security requirements: note collateral, guarantees, hypothecation and consequences of default.
- Read exit terms: verify foreclosure, part-prepayment, bounce, late-payment and mandate-failure charges.
- Test service quality: find the documented grievance route, response timelines and collection practices before signing.
- Borrow only what the budget supports: compare the instalment with stable income after existing obligations, not with a promotional eligibility amount.
Ask both lenders for a repayment schedule and key-fact statement where applicable. Keep the sanction letter, fee schedule and receipts; those documents are essential if a charge or collection action is disputed.
A repeatable NBFC comparison worksheet
For each company, fill one row using the latest audited annual report and regulatory disclosures:
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- Products, secured/unsecured split and top geographic or borrower exposures
- Year-end and average AUM, disbursements, active customers and new loans
- NII, NIM, fee income, expense-to-income, pre-impairment profit, ROA and ROE
- GNPA, NNPA, early delinquency, write-offs, provisions, credit cost and coverage
- CRAR, Tier-I/CET1, leverage, liquidity and maturity gap
- Deposits, bank loans, bonds, commercial paper, external borrowings and securitisation
- Branches, digital acquisition, repeat use, cost per loan and collections
- Governance observations, concentration limits, ratings and valuation
Mark each figure with its date, unit, basis and definition. If a peer has not disclosed an equivalent metric, write “not stated” rather than estimating it from a different measure.
Common comparison mistakes
- Ranking by AUM alone: ignores product risk, collateral and customer type.
- Mixing periods: a March year-end figure cannot be fairly compared with a later quarterly number without qualification.
- Mixing standalone and consolidated accounts: subsidiaries can materially change AUM, profit and capital.
- Treating GNPA as a complete risk measure: omit provisions, write-offs, seasoning and early arrears and the picture is incomplete.
- Confusing ROE with shareholder value: valuation, dilution and future credit losses determine returns.
- Using investor metrics for a loan choice: borrowers need APR, fees, security and service terms.
- Ignoring regulation: Upper-Layer obligations, deposit status and HFC rules affect comparability and funding.
Bottom line for comparing Bajaj Finance and peers
Bajaj Finance’s FY2024-25 profile combines large scale, 26% AUM growth, 4.57% ROA, 19.19% ROE, 0.96% GNPA, 0.44% NNPA and strong reported capital. Its 72% year-on-year increase in loan-loss provisions shows why the scorecard must include credit cost and portfolio seasoning. Compare it with each NBFC’s matching business segments, RBI category, funding structure and audited period; then apply a separate investor or borrower decision rule. Without synchronized peer filings, the responsible conclusion is a method and baseline—not an unsupported league table.
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