Bajaj Finserv sees Rs75 crore investment in AMC business

Bajaj Finserv, a financial services company, is planning an investment of Rs50-75 crore in the asset management business in partnership with Allianz.

While the business would be launched in calendar year 2012, the investment would be made over 2-3 years, managing director Sanjiv Bajaj said after the release of fiscal 2011 results.

The company’s consolidated net profit for the last quarter of fiscal 2011 doubled to Rs873 crore from Rs438 crore in the March quarter in fiscal 2010.

As a result, the company closed the last fiscal with almost 100% jump in net profit to Rs1,115 crore.

The company’s lending business arm, Bajaj Finance, reported 178% jump in net profit for the whole fiscal to Rs247 crore. However, rising interest rate scenario may pose challenges in the current fiscal.

“We could see some slowdown in growth in the second half of the year. We would be watching credit quality in the small and medium enterprises, said Bajaj.

He did not rule out an infusion of capital from the parent company to meet future requirements.

“We are adequately capitalised now, but we may look at it as the situation develops”, he said.

Capital adequacy ratio stood at 20% as on March 31, 2011.

The life insurance business saw a 95% rise in shareholder profit, or the portion of profits which excludes that of joint venture partner Allianz, to Rs1,057 crore in fiscal 2011.

The company is meeting challenges posed by recent regulatory changes by changing the distribution mix.

“We are increasing our exposure to the banking channel as agents adjust to the new regulatory environment, said Bajaj, adding that he expects the life insurance business to be challenging over the next two-three quarters.

The general insurance business saw a 64% dip in profit from Rs121 crore last year to Rs43 crore in fiscal 2011 following a direction from the insurance regulator to insurance companies increasing provisions to meet third-party liability of motors accidents.