Bajaj Finserv will launch a wealth management business, including financial products distribution and advisory services, for retail customers in the second quarter of the financial year, Managing Director Sanjeev Bajaj has said.
Wealth management services, to be operated by Bajaj Financial Solutions, would initially be launched in five cities and expanded to five other cities by the end of the year.
“Wealth management for high-end customers is already a crowded space. Our offering will be targeted at middle class and upper-middle class customers with average annual savings of around Rs 5 lakh,” Bajaj said.
The company has appointed Arpit Agarwal as chief executive officer for the business.
Bajaj Finserv’s lending unit, Bajaj Auto Finance (BAFL), started offering loans for purchase of construction equipment from April 1. The average ticket size of the loan would be Rs 35 lakh and it would be secured against hypothecation of construction and mining equipment, said the company.
The company has also started offering loans against securities in seven markets from April 1. BAFL would offer retail loans against securities to high net worth customers where the loan would be offered against shares and mutual fund units. “The ticket size of the loan would be in the range of Rs 50 lakh to Rs 10 crore,” the company said. Chief Financial Officer and President- Business Development Kevin D’Sa said Bajaj Auto Finance had a loan book size of Rs 4,500 crore, which it planned to raise to Rs 10,000 crore over the next 18-24 months.
Loans for two-wheelers currently accounted for about 40 per cent of Bajaj Auto Finance’s book, while consumer durables and loans against property made up the rest, D’Sa said.
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Bajaj Finserv’s license application for an asset management company in partnership with Allianz is currently pending approval from the Securities and Exchange Board of India (Sebi).
Bajaj said he expected to get an in-principle approval from Sebi in the next 10-12 weeks and would start the business some time in 2011.