Bajaj Auto Finance, the non-banking finance company (NBFC) from the Bajaj Auto stable, is planning to increase its branch network in the country by 33 per cent over the next one year, from 40 at present to 60.
The company, which offers loans for purchase of Bajaj Auto's two-wheelers and other electronic durables, is also targetting a Rs 150 crore rise in loan disbursements to Rs 650 crore during the current fiscal to attain critical mass in the finance business.
Dipak Poddar, managing director of Bajaj Auto Finance, said, "Over the next one year, we will be adding another 20 branches to our existing network of 40 branches to spread our reach. We are basically targetting the smaller cities and towns due to competition from bigger finance companies in the major urban centres."
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Currently, 45 per cent of Bajaj Auto Finance's disbursements are towards Bajaj Auto's range of two-wheelers, while the balance 55 per cent of its portfolio consists of loans for consumer durables such as televisions, refrigerators, etc.
According to Poddar, the company's cost of funds ranges in the 11-14 per cent bracket, while its average rates of interest charged are around 18-21 per cent.
The company's focus on rural areas is due to the high competition in urban markets, which has led to "wafer thin margins".
Currently, the company's non-performing assets stand at 2 per cent while its other administrative costs are around 4 per cent.
Meanwhile, Bajaj Auto today launched its 4-stroke compressed natural gas (CNG) autorickshaw in Mumbai, following its launch in Delhi early this year. Around 23,000 CNG autorickshaws from the company are plying in the Delhi market currently.
Madhur Bajaj, vice-chairman of Bajaj Auto, said, "We expect sales of the CNG autorickshaw to increase gradually, as the infrastructure in the form of CNG dispensing stations and its availability is improving slowly."
Currently, there are 23 CNG dispensing stations in Mumbai, with an average sale of around 1 lakh kilo per day.
Three-wheelers are among the most profitable product from Bajaj Auto, which is the largest producer of autorickshaws in the country.