The Start-up CEO

Past experience taught Rajeev Jain, 45, invaluable lessons. The MD and CEO of Bajaj Finance, a management graduate from Manipal, credits his current success to two previous assignments - a management accounting job at Eicher Span Financial, his first assignment, in the early 90s and then a product management stint in 1999 with ANZ Grindlays. "I did both the jobs for a year, but they had a big impact on me in understanding accounting as well as product dynamics," he says.

Jain has been at the helm of affairs at Bajaj Finance for eight years. In this period, he has transformed the small-sized company into one of the fastest growing NBFCs in India. The numbers alone tell a story. The revenues have soared from Rs 400 crore when he joined to Rs 5,400 crore. The profits have pole-vaulted from Rs 47 crore to close to Rs 900 crore. The assets under management have swelled from Rs 2,761 crore to a staggering Rs 32,410 crore. There is more. The assets or balance sheet size at Rs 37,964 crore gives many of the old private sector banks, such as Ratnakar Bank, Lakshmi Vilas Bank and Catholic Syrian Bank, a run for their money.

Digital foray with the launch of an EMI app for instant loans

Meanwhile, given the scorching pace at which Bajaj Finance is growing, the company will require a banking platform to compete with banks in the retail business, because of constraints on the funding side. The company is expected to end the year with Rs 45-47,000 crore loan book by the end of the year. In the next five years, Bajaj Finance will have Rs 1,25,000 crore balance sheet size. The company, however, failed to get a universal banking licence two years ago. "In the next five to seven years, we don't see any constraint in operating without a bank," says Jain. In fact, Jain is now focused on changing the funding mix which is predominantly bank financing and debt funded. "We are in our next phase of journey as a company. Our asset side diversification is largely complete. We will now work towards diversifying retail liabilities or deposits," says Jain. The current contribution of retail fixed deposits is in single digit. "In the next five years, we will have 20-22 per cent of the balance sheet funded by retail deposits," says Jain. Many say the competition to Bajaj Finance will also come from new Payments banks and Small Finance banks in the digital space as well as the rural market.

ICICIdirect, an online brokerage, while bullish on the company, listed out certain risks and concerns. It talked about the possibility of banks facing slowdown in corporate and SME loans, making inroads into Bajaj's stronghold in consumer durable

financing. In addition, the loan against property and home loan portfolio could also get impacted if there is a fall in property prices. "The unsecured loans have also increased recently. This portfolio could also pose a risk," says the report.

"The challenge in this sector is to have a profitable growth with suitable risk management in place. The evidence of that is very low NPAs with strong business growth that is rewarded by the market as reflected in share price," says Manmohan Singh, who knows him for close to two decades. Jain is focusing on customer experience, and product and process innovations to create a differentiated and profitable business model. Jain has launched India's first EMI finance app which gives loan approvals in 60 seconds. The company has already given some 82,000 approvals in less than three weeks. "We think it is informational and will change the way our business model will work in the years to come," says Jain. Many banks are now studying his EMI app model. Clearly, the start-up CEO is taking a lead in the digital world.