### **Overview** Baid Finserv Limited is a non-deposit-taking Non-Banking Financial Company (NBFC) operating under the Base Layer category, regulated by the Reserve Bank of India (RBI). Incorporated in 1991 as *Baid Leasing & Finance Company Ltd.*, the company rebranded to **Baid Finserv Limited** in 2022 and successfully listed on both the **National Stock Exchange (NSE)** and **Bombay Stock Exchange (BSE)** in 2023. Headquartered in Jaipur, Rajasthan, the company has over **33 years of industry experience** and specializes in **secured asset-backed lending**, primarily targeting **underserved semi-urban and rural populations** across India. The company serves as a key player in financial inclusion, focusing on customers who are underbanked or lack formal credit history, by offering tailored financial solutions based on aspirations, cash flows, and economic potential rather than rigid documentation. --- ### **Core Business Segments** - **Secured MSME Loans (including Loan Against Property - LAP)** - **Vehicle Financing**: Tractor loans, commercial vehicles (used & new), passenger vehicles, 3-wheeler electric vehicles - **Insurance Products**: Life, motor, and dwelling insurance - Recent focus on **electric mobility financing** and **co-lending models** As of FY24, **78% of the loan portfolio** was attributed to MSME loans, with the remainder in vehicle and mortgage loans. The **Housing/LAP segment** grew from ₹245.36 crore in FY22 to ₹296.24 crore in FY24, while **vehicle financing surged from ₹17.79 crore to ₹71.76 crore** over the same period. --- ### **Market Position & Strategy** #### **Target Market** - Focus on **CAT B/C towns, rural markets, and underserved geographies**, especially in Rajasthan, Madhya Pradesh, Gujarat, and soon, Maharashtra. - Targets **small business owners, first-time entrepreneurs, owner-operators of commercial vehicles, and agricultural communities**. - Operates primarily in regions with low bank penetration, leveraging deep local relationships and trust. #### **Unique Value Propositions** 1. **Proprietary Credit Appraisal Grid**: Custom-designed for rural and semi-urban customer assessment, enabling risk evaluation beyond traditional credit scores. 2. **Customer-Centric Approach**: Emphasis on *customer aspirations and repayment capacity* over formal credit history or documentation. 3. **Fast & Flexible Disbursement**: Minimal paperwork, rapid turnaround supported by digital tools. 4. **Deep Rural Penetration**: Strong presence in east Rajasthan and expanding into new states. --- ### **Geographical Expansion & Branch Network** - **Current Operations**: Active in **Rajasthan, Madhya Pradesh, and Gujarat**, with over **52 branches** as of Q3 FY25. - **Expansion Roadmap**: - Entry into **Maharashtra planned by Q2 FY25**, with initial 4–5 branches. - Target to operate **75 branches by FY25**, **100 branches by March 2026**, and **125 branches by March 2027** across four states. - **Growth Hubs**: Madhya Pradesh and Gujarat show strong momentum, with **15% month-on-month disbursement growth**, better portfolio quality, and rising AUM. - Expansion driven by rising demand, ease of operations in new markets, and challenges in recruitment within saturated areas of Rajasthan. --- ### **Financial Performance & Targets** - **AUM Growth**: - FY22: ₹305 crore - FY23: ₹325 crore - FY24: ₹368 crore (**22.31% YoY growth**) - **Borrowings**: Increased to ₹242 crore in FY24 (**+41% YoY**), driven by partnerships with small finance banks and commercial lenders. - **Capital Adequacy Ratio (CAR)**: Maintained at a healthy **48.2%** as of Sep 2023. - **Future AUM Targets**: - ₹500 crore by FY25 - ₹600 crore by FY26 - ₹600+ crore by FY27 By FY26, the company expects **₹200 crore in incremental AUM** from new markets (MP, Gujarat, Maharashtra). --- ### **Funding & Risk Profile** - **Funding Sources**: Diversified, relying on **small finance banks, commercial banks, and other NBFCs**. Recent strategic **partnerships with small finance banks** support co-lending and capital access. - **Credit Rating**: Rated **BBB (Stable)** by **CARE Ratings Limited**, enabling access to competitive borrowing rates. - **Key Funding Challenge**: Rising competition necessitates **low-cost funding** to maintain margins and competitive interest rates. - The company is exploring **co-lending arrangements** and **Bank Credit Enhancement (BCE)** lines to retain customers and improve balance sheet efficiency. --- ### **Competitive Landscape & Challenges** - **Intense Competition**: Faces pressure from large NBFCs (e.g., Bajaj Finance, Shriram Finance), regional players (SK Finance, Lakshmi India), and small finance banks (AU Bank, IDFC First). - **Product Standardization**: Increasing pressure is leading to **declining interest rates, lower processing fees, and tight NIMs**. - **Customer Retention**: Larger players offer top-up loans, longer tenures, and better rates—Baid counters through localized service, fast disbursal, and co-lending innovation. - **Risks**: - Rising interest rates and inflationary pressures - Credit scarcity and economic slowdowns - Regulatory changes and political instability - Employee attrition in mature markets (though newer markets show strong retention) --- ### **Growth Drivers** 1. **Geographical Expansion**: Focus on underbanked regions in Maharashtra, deeper penetration in Gujarat and Madhya Pradesh. 2. **Digital Transformation**: - Implementation of **Graviton’s LOS and LMS platforms** for real-time loan processing. - Use of **Collect-ON app** for real-time collections; rural cash collections synchronized to HQ within seconds. - Investments in **AI-driven credit assessment** and **digital onboarding** to improve accuracy and reduce turnaround time. 3. **Product Diversification**: - Plans to launch **2-wheeler loans, micro housing loans**, and **co-lending solutions**. - Expansion into **electric 3-wheeler financing** aligns with green mobility trends. 4. **Government & Policy Tailwinds**: - Benefits from government initiatives such as **PMMY, UPI, GST, ONDC, TReDS, and GeM**, supporting MSME formalization and digital adoption. 5. **Strong Leadership & Succession**: - **Mr. Panna Lal Baid (CMD)**: Founder with **55+ years of experience**, instrumental in shaping the company’s strategy in pre-owned vehicle financing and secured lending. - **Mr. Aman Baid (Whole Time Director)**: SP Jain alumnus, has led credit policy design, expansion, and digital transformation over 12+ years at the company. --- ### **Operational Model** - **Branch-Based Structure**: Low setup cost (₹2–3 lakhs per branch), each takes **5–6 months** to reach self-sustainability at ₹3–4 crore AUM. - **Human Capital**: Prioritizes hiring local staff with market knowledge and provides continuous training to enhance customer engagement and compliance. - **Technology Stack**: Fully digital origination to recovery process, enabling scalability and operational control. --- ### **Key Financial & Strategic Targets (FY25–FY27)** | Metric | Target | |-------|--------| | **Assets Under Management (AUM)** | ₹500 crore (FY25), ₹600 crore (FY26), ₹600+ crore (FY27) | | **Branch Network** | 75 branches (FY25), 100 (Mar 2026), 125 (Mar 2027) | | **Geographic Reach** | Rajasthan, MP, Gujarat, Maharashtra | | **New Product Launches** | 2-wheeler loans, micro housing loans, co-lending, EV financing | | **Technology Focus** | AI-driven credit assessment, digital loan processing, real-time collections |