Rahul Bajaj steps down as chairman of another group company, passes baton to son Sanjiv

Industrialist Rahul Bajaj has decided to step down as chairman of another group company, passing the baton to his son Sanjiv. Bajaj Sr will step down as Non-Executive Chairman of Bajaj Finance on July 31, after being at the helm of the company for over three decades.

Sanjiv Bajaj, currently Vice Chairman, will succeed his father at the helm of the company, Bajaj Finance said in a regulatory filing on Tuesday.

"Rahul Bajaj, Non-Executive Chairman of the company, having been at the helm of the company since its inception in 1987 and the group for over five decades, as part of succession planning, has decided to demit the office as chairman of the board with effect from close of business hours on July 31, 2020," the company said.

The company's board has approved the appointment of Sanjiv Bajaj as Non-Executive Chairman of the company with effect from August 1, 2020, in place of Rahul Bajaj, the filing said. 

Rahul Bajaj, however, will continue to serve the company as a non-executive non-independent director.

Bajaj Finance Q1 profit falls 19% to Rs 962 crore

Bajaj Finance on Tuesday posted 19% year-on-year fall in consolidated net profit at Rs 962 crore for the April to June quarter. It had posted a net profit of Rs 1,195 crore in the corresponding quarter of last year.

Bajaj Finance said its business operations in Q1 FY21 were considerably impacted due to Covid-19 pandemic and the consequent lockdowns. This resulted in significantly lower business acquisition and constraints on recovery of overdue from customers. However, consolidated assets under management (AUMs) grew by 7% to Rs 1.38 lakh crore in Q1 FY21 from Rs 1.28 lakh crore in Q1 FY20.

Consolidated moratorium book reduced to Rs 21,705 crore (or 15.7% of AUM) from Rs 38,599 crore (or 27% of AUM) as of April 30 due to reduction in bounce rate coupled with better collection efficiency.

During the quarter, the Bajaj Finance made an additional contingency provision for COVID-19 of Rs 1,450 crore, taking the overall contingency provision to Rs 2,350 crore as of June 30. The contingency provision for COVID-19 is now at 10.8% of consolidated moratorium book.

"This contingency provision together with existing expected credit loss provision of Rs 623 crore provides an overall provisioning coverage of 13.7% on the consolidated moratorium book."

Additionally, as a matter of prudence, the company also reversed Rs 220 crore of interest income from the interest capitalised during the moratorium period. However, gross non-performing assets (NPAs) and net NPAs stood at 1.4% and 0.5% respectively against 1.6% and 0.64% last year.

Bajaj Finance said it continues to remain well capitalised with capital to risk assets ratio (CRAR) of 26.4%. It remains one of the best capitalised large non-banking finance companies in India. The company said its liquidity position remains strong with an overall liquidity surplus of nearly Rs 17,700 crore on a consolidated basis. The liquidity surplus as of July 20 was about Rs 20,590 crore. 

Bajaj Finance shares tank by 4%

Bajaj Finance shares tanked by nearly 4% on account of its weak performance and leadership change announcement.