#1BAJAJ B FINSERV Bajaj Finance Limited Q1 FY21 Investor Presentation 21 July 2020#2Presentation Path Section 01 Executive summary - Q1 FY21 Financial performance - Q1 FY21 Kil Section 03 MM Section 05 Section 07 Customer franchise and distribution reach Update on credit quality 2 25 36 43 Click on the section to view Section 02 Bajaj Finance Limited overview ✓ A Section 04 Asset liability management 12 29 Section 06 Business segment wise AUM 40 BAJAJ B FINSERV#31.1 Quarter gone by ☐ Section 01 Executive summary - Q1 FY21 1.2 Executive summary on Q1 FY21 1.3 Update on Moratorium B BAJAJ FINSERV Back 3#4Quarter gone by B BAJAJ FINSERV USD 1 INR 75 Q1 was a pandemic quarter. The focus was on employee safety, capital preservation, liquidity management, business scenario planning, opex management, collections capacity augmentation, customer propositions, business transformation framework and lastly but most importantly calibrated restart of business as the country started to reopen. Q1 FY21 AUM Opex to NII PAT $ 18,407 MM Yo Y Grow th 7% 27.9% Q1 FY20 35.0% $ 128 MM Yo Y Growth (19%) ROE* Net NPA 2.9% Q1 FY20 5.9% *Not annualized 0.50% Q1 FY20 0.64% Back 4#5- Executive summary Q1 FY21 Balance Sheet and Franchise: B BAJAJ FINSERV USD 1 INR 75 1. Business operations were closed till 10 May 2020 and gradually restarted as local administrations eased lockdown conditions. As of yesterday, company is operational in 2,322 location which represents 85% of company's business. 86 locations are closed for business and collections which represents 15% of company's business. 2. AUM growth moderated to 7% YoY due to lockdown. It stood at $ 18,407 MM in Q1 FY21. 3. The Company restarted its sales finance, auto finance, LAS and Gold loan businesses from 10 May 2020 with stringent loan to value (LTV) norms and focus on existing customers. Semi urban and rural market volume recovery is much stronger than anticipated. 4. Home loan and Credit card distribution businesses were restarted in June'20. 5. 6. 7. 8. Restart of loan against property, SME, B2C urban, B2C rural and commercial businesses was deferred to July'20 due to extension of moratorium. At this juncture, based on our assessment, 75+ cities should revert to pre-COVID volum es by October, 40-75 Cities by end November, 10-40 cities by January and top 10 cities by March. All this is of course subject to Government of India not enforcing a 2nd nationallockdown. Based on this assessment, the Company estimates AUM growth of 10-12% in FY21. Post restart in May, bounce rate and collection efficiency of 1.7 MM new loans disbursed is in line / marginally better than Pre- COVID (Feb 20). If these metrics continue, the Company will be comfortable taking a stronger growth stance for 2nd half of the year. Given the lockdown, the Company increased focus on its 42.95 MM customer franchise to increase penetration of fee products like health card, health insurance etc. The Company sold 533K health card to its existing EMI card customers in Q1 FY21. This product comes with higher limit, EMI financing tie ups at multi speciality hospitals and various other wellness benefits. Back 5#6Executive summary - Q1 FY21 BAJAJ B FINSERV USD 1 = INR 75 9. Given the lockdown, the Company decided to convert some of its existing customers with no overdue and good repayment track record from term loan to a flexi loan for a switch fee. The Company has been offering flexi loans to its customers for the last 5 years. As of March 31st, the existing book under flexi stood at $ 4,913 MM. The product provides the customers with flexibility to drawdown when they need and prepay when they want digitally. It also has an added feature of only interest servicing for first 1 - 2 years. In Q1 FY21, the company has converted $ 1,147 MM of term loans into flexi loans. 10. The Company acquired 0.53 MM new customers in the current quarter. Total custom er franchise stood at 42.95 MM as of 30 June 2020, a growth of 16% YoY. 11. Existing customers contributed to 70% of new loans booked during Q1 FY21. Liquidity Management 12. As of 20 July 2020, the Company had consolidated liquidity buffer of $ 2,745 MM and SLR investments of $ 340 MM. This represents 19.2% of its total borrowing. Given the environment, the Company will continue to run high liquidity buffer, despite an impact on cost of funds in the short term. 13. The carry cost of excess liquidity in Q1 was $ 23 MM. 14. Deposits book stood at $ 2,675 MM, a growth of 33% YoY. Its contribution to consolidated balance sheet was 17% as of 30 June 2020. The Company continued to attract sizable retail deposits in Q1. The Company reduced rates for its retail deposit rates twice in Q1 aggregating to a drop of 65 bps. The Retail: Corporate mix stood at 70: 30 as against 63: 37 in Q4 FY20 in line with its strategy of reducing its reliance on corporate deposits. Back 6#7Executive summary - Q1 FY21 B BAJAJ FINSERV USD 1 = INR 75 15. During the quarter, S&P Global has downgraded the Company's long-term issuer credit rating from BBB-/ Negative to BB+/stable and short-term rating from A-3 to B. S&P global ascribes this downgrade, to weakening economic conditions due to COVID-19 which has also led to them revising the NBFC sector anchor rating from BB to BB-. Operating expense management 16. Opex to NII im proved to 27.9% in Q1 FY21 as against 35.0% in Q1 FY20. 17. Opex for Q1 FY21 was lower by 11% YoY and 20% QoQ to $ 154 MM. Sequentially, opex dropped by $ 39 MM. 18. The Company has taken several actions including fixed pay cut (5% at junior level to 17.5% at senior most level), no incentives for Q1, call center optimization, freeze on travel, advertising & promotion and deferred physical trainings etc. to reduce its cost base. 19. The Company has paused replacement and new hiring, branch expansion and deferred other discretionary costs till Sep'20. Credit Costs 20. Reserve Bank of India, in view of the extension of lockdown and continuing disruption on account of COVID-19, extended the moratorium by another 3 months till 31 August 2020. 21. Consolidated moratorium book reduced to $2,894 MM (15.7% of AUM) as of 30 June 2020 from $ 5,147 MM (27.1% of AUM) as of 30 April 2020 owing to reduction in bounce rate coupled with im proved collection efficiencies. (Refer page 11) Back 7#8Executive summary - Q1 FY21 BAJAJ B FINSERV USD 1 INR 75 22. During the quarter, the Company has taken an additional contingency provision for COVID-19 of $ 193 MM taking its contingency provision for COVID-19 to $ 313 MM as of 30 June 2020. The contingency provisioning for COVID-19 is now at 10.8% of moratorium book. This contingency provision together with existing ECL provision of $ 83 MM provides an overall provisioning coverage of 13.7% on the consolidated moratorium book. 23. Additionally, as a matter of prudence, the Company has reversed interest income to the tune of $ 29 MM from the interest capitalized during moratorium period. 24. The Company last provided an update on its credit cost scenario model on 6 April 2020. The company considered lockdown of up to 50-days for its various scenario planning. We estimated an 80-90% increase in credit costs ($ 720-760 MM for FY21) assuming lockdown till 15 May 2020. 25. However, the national lockdown continued for 68 consecutive days till 31 May 2020 and it was followed by multiple district / state level lockdowns imposed by respective local authorities. At this juncture, big cities like Bangalore and Pune are in midst of more stringent lockdown than the national lockdown. 26. The Company has now updated its credit cost scenario model for FY21 considering extended disruptions. It now estimates its credit costs to increase by 100-110% ( $ 800-840 MM for FY21) over the pre-COVID credit cost of previous year. The Company has strong pre-provision profitability to absorb increased losses caused by COVID-19. 27. The Company has significantly augmented its collections infrastructure to mitigate its credit costs. It has added 2,800 collections officers and approximately 16,000 collection agency staff to manage the increased bounce volumes caused by COVID-19. 28. At this juncture, based on our assessment, 75+ cities should revert to pre-COVID collection efficiencies by November, 40-75 Cities by end December and 10-40 cities by February. Top 10 cities collection efficiency forecast is tough to predict. All this is of course subject to Government of India not enforcing a 2nd national lockdown. Back 8#9Executive summary - Q1 FY21 Profitability BAJAJ B FINSERV USD 1 = INR 75 28. Consolidated PAT for the quarter contracted by 19% YoY to $ 128 MM after taking contingency provision of $ 193 MM and interest income reversal of $ 29 MM. Pre-provision profitability remained strong. 29. The Company has revised its margin profile in certain businesses to protect its overall profitability. On mortgage business, the company is facing significant pricing pressure and is repivoting its mix marginally for short to medium term. 30. Return on Assets for the quarter was 0.7% and Return on Equity was 2.9% (not annualized) Capital: 31. The Company continues to remain very well capitalised with CRAR of 26.4% as of 30 June 2020. Its Tier-1 capital was 22.6%. The Company remains one of the best capitalised large NBFCs in India. Business transformation - 'Never let a crisis go waste': 32. The Company is accelerating its 3rd transformation journey conceptualized in Q3 FY20. The company is utilizing this pandemic time to completely transform itself by deploying "Zero based budgeting" methodology to reimagine all its businesses and functions. All businesses and functions are getting into micro detail of every process, customer moment of truth and cost lines and completely reimagining them. As a result, we plan to come out of this crisis as a company with enhanced customer experience, stronger digital orientation and a leaner cost structure. As and when dem and comes back fully, we will be ready to leverage this transformation to grow our business rapidly. 33. At this juncture, company has access to 105 MM customers and prospects. It intends to create an ecosystem of sales finance products and complete range of financial services for these customers and prospects. Back 9#10Executive summary - Q1 FY21 BAJAJ B FINSERV USD 1 = INR 75 34. Over the last 5 years, the Company has made significant investments in broadening its presence in payments railroad through its EMI card, Credit Card and Wallet offerings. It will accelerate integration of its sales finance ecosystem on its payment railroad. 35. Over the last 3 years, the company has been testing its omnichannel strategy of 'online to offline' and 'offline to online' by integrating customers and retailer ecosystem. It is working on integration of its ‘020' model to deliver significantly higher velocity to its merchant ecosystem and reduced friction for its customers. This transformation will help retailers sell more products and also help the Company sell more financial services at point of sale as well as subsequently. 36. Existing customers would be able to access financial services across lending, insurance, investments and payments in maximum 3 clicks. Subsidiary 37. Bajaj Housing Finance Ltd (BHFL) continued to grow in a robust manner delivering profit after tax growth of 31% to $ 12 MM in Q1 FY21 against $ 9 MM in Q1 FY20. 38. BHFL'S AUM increased by 52% to $ 4,398 MM as of 30 June 2020 from $ 2,899 MM as of 30 June 2019. 39. BHFL's Net Interest Income for Q1 FY21 was up by 23% to $ 32 MM from $ 26 MM in Q1 FY20. 40. BHFL's Opex to NII improved to 30.4% in Q1 FY21 as against 41.4% in Q1 FY20. 41. During the quarter, BHFL made a contingency provision of $ 6 MM for COVID-19 taking the overall contingency provision for COVID- 19 to $ 13 MM as of 30 June 2020. 42. Bajaj Financial Securities Ltd (BFinsec) made a net loss of $ 0.2 MM in Q1 FY21. Back 10#11Update on Moratorium As on 30 April 2020 As on 30 June 2020 B BAJAJ FINSERV USD 1 = INR 75 Values in MM % of % of AUM COVID COVID + ECL AUM Business Segment AUM AUM under Provision under ECL Provision AUM Provision as AUM under under Morat Amt % of Morat Morat COVID Provision Amt COVID + ECL ECL Provision Provision as % of Morat Morat Morat Auto Finance 1,830 1,281 70.0% 28 41 5.4% 1,707 859 50.3% 74 28 11.8% Sales Finance 1,413 366 25.9% 8 8 4.4% 1,231 242 19.6% 33 6 15.8% Consumer B2C 4,067 1,169 28.8% 33 34 5.8% 3,896 594 15.2% 105 23 21.6% Rural Sales 310 92 29.6% 1 1 2.6% 279 29 10.2% 5 1 19.6% Finance Rural B2C 1,420 403 28.3% 13 11 5.8% 1,371 135 9.9% 24 5 21.1% SM E Lending 2,540 761 30.0% 23 21 5.7% 2,437 299 12.3% 45 10 18.5% Securities 538 2 0.3% 528 Lending Commercial 829 204 24.6% 3 0 1.9% 810 156 19.2% 7 0 5.0% Mortgages 6,128 869 14.2% 9 14 2.7% 6,150 580 9.4% 21 10 5.4% BFL Consol 19,076 5,147 27.1% 120 129 4.8% 18,407 2,894 15.7% 313 83 13.7% Total Provision - 249 Total Provision - 396 Back 11#12Section 02. Bajaj Finance Limited overview BAJAJ B FINSERV 2.1 Bajaj group structure 2.2 What do we stand for 2.3 Our shareholder profile 2.4 10-year financial snapshot 2.5 Product suite 2.6 Executive summary Back 12#13Bajaj group structure I Bajaj Finserv Limited (Listed) Financial services arm @39.16% 1 Bajaj Finance Limited (Listed) Lending business arm Bajaj Housing Finance Limited I Mortgage Lending 52.82% 3 Bajaj Holdings & Investment Limited (BHIL) (Listed) *33.43% 2 Bajaj Auto Limited (Listed) Bajaj Allianz Life Insurance Company Ltd Protection and retiral Auto business arm 74% BAJAJ B FINSERV Bajaj Allianz General Insurance Company Ltd Protection 100% 100% Bajaj Financial Securities Limited 2. 1. 60.80% holding through promoter holding company and promoter group 53.69% holding through promoter holding company and promoter group Broking & Depositary 3. 56.20% holding through promoter holding company and promoter group Above shareholding is as of 30 June 2020 @BHIL has an additional stake of 2.34% through, Maharashtra Scooters Limited, and 0.13% through Bajaj Auto Holdings Limited, subsidiaries of BHIL *BHIL has an additional stake of 2.34% through its subsidiary, Maharashtra Scooters Limited 74% Back 13#14What do we stand for B BAJAJ FINSERV “Non-bank with strategy & structure of a bank” "Focused on mass affluent & above clients with a strategy to cross sell" "Diversified financial services strategy with an optimal mix of risk and profit to deliver a sustainable business model" "Business construct to deliver a sustainable ROA of 3.3-3.5% and ROE of 19-21% in the long term "Focused on continuous innovation to transform customer experience and create growth opportunities" Back 14#15Our general long-term guidance on financial metrics B AUM growth in corridor of 25% -27% Profit grow th in corridor of 23% -24% میرا GNPA in corridor of 1.4% -1.7% Kil NNPA in corridor of 0.4% -0.7% Return on assets in corridor of 3.3% -3.5% Return on equity in corridor of 19% -21% BAJAJ FINSERV Back 15#16Key strategic differentiators Part of the Bajaj group - one of the oldest & most respected business houses A trusted brand with strong brand equity BAJAJ B FINSERV Focus on mass affluent and above clients Total customer franchise of 42.95 MM Strong focus on cross selling assets, payments, insurance and deposit products to existing customers A well diversified balance sheet Highly agile & innovative Deep investment in technology and analytics Centre of Excellence for each business vertical to bring efficiencies across businesses and improve cross sell opportunity. Consolidated lending AUM mix for Consumer: Rural: SME: Commercial: Mortgages stood at 37% 9% 13% 7% 34% Consolidated borrowing mix for Money Markets :Banks: Deposits: ECB stood at 40% 39% 17% 4% Continuous improvements in product features and digital technologies to maintain competitive edge. Has helped achieve multi product cross sell and manage risk & controllership effectively. Obsessed to deliver frictionless experience to customer Back 16#17Our shareholder profile B BAJAJ FINSERV 1.08% MF 7.26% Others S.No 1 BAJAJ FIN SERV LTD GOVERNMENT OF SINGAPORE MAHARASHTRA SCOOTERS LTD. 2 Top 20 investors & their holdings Name of Shareholder As on 30 As on 31 As on 30 Jun 20 March 20 Jun 19 52.82% 52.82% 54.81% 4.30% 4.46% 3.74% 3 3.15% 3.15% 3.27% 4 AXIS LONG TERM EQUITY FUND 0.82% 0.76% 0.89% Resident & non resident individuals 9.92% 5 NEW HORIZON OPPORTUNITIES MASTER FUND 0.77% 0.77% 0.80% 6 STEADVIEW CAPITAL MAURITIUS LTD. 0.77% 0.79% 1.26% 7 LIFE INSURANCE CORPORATION OF INDIA 0.69% 0.15% 0.00% Corporates Shareholding profile 4.30% 8 NEW WORLD FUND INC. 0.56% 0.56% 0.58% 9 SBI ETF NIFTY 50 0.56% 0.65% 0.47% 10 SBI EQUITY HYBRID FUND 0.55% 0.45% 0.43% 11 AXIS BLUECHIP FUND 0.54% 0.41% 0.26% 12 SMALL CAP WORLD FUND INC 0.54% 0.54% 0.56% 13 VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND 0.51% 0.52% 0.47% Promoters & 14 AXIS FOCUSED 25 FUND Promoter Group 0.44% 0.36% 0.31% 15 SBI LIFE INSURANCE CO. LTD 0.44% 0.48% 0.36% 56.20% FII & FPI 21.24% 16 ST. JAMES'S PLACE EMERGING MARKETS EQUITY UNIT TRUST MANAGED BY WASATCH ADVISORS INC 17 VANGUARD EMERGING MARKET STOCK INDEX FUND 18 SBI FOCUSED EQUITY FUND 19 DF INTERNATIONAL PARTNERS 20 UTI - EQUITY FUND Above shareholding is as of 30 June 2020 0.43% 0.23% 0.25% 0.41% 0.44% 0.47% 0.38% 0.26% 0.09% 0.38% 0.22% 0.30% 0.38% 0.32% 0.35% Back 17#1810-year financial snapshot B BAJAJ FINSERV USD 1 = INR 75 Values in MM Financials snapshot Ⓡ @ FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18° FY19° (Consol.) (Consol.) FY20° Yo Y (Consol.) (FY19-FY20) CAGR (10 yrs) Assets under management 1,010 1,748 2,336 3,208 4,321 5,897 8,026 10,990 15,452 19,620 27% 39% Income from operations 187 290 415 543 722 978 1,332 1,701 2,467 3,518 43% 39% Interest expenses 49 99 161 210 300 390 507 615 883 1,263 43% 43% Net Interest Income (NII) 138 190 254 333 423 587 825 1,086 1,584 2,255 42% 36% Operating Expenses 61 89 113 153 190 253 342 436 560 755 35% 32% Loan Losses & Provision (ECL) 27 21 24 34 51 72 107 137 200 524 162% 39% Profit before tax 49 80 116 145 181 262 376 512 824 976 18% 39% Profit after tax 33 54 79 96 120 171 245 333 533 702 32% 40% Ratios FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 Opex to NII 44.4% 47.0% 44.6% 46.0% 45.0% 43.1% 41.4% 40.2% 35.3% 33.5% Return on assets 4.4% 4.2% 4.1% 3.6% 3.3% 3.5% 3.7% 3.7% 4.2% 4.1% Return on equity 19.7% 24.0% 21.9% 19.5% 20.4% 20.9% 21.6% 20.1% 22.5% 20.2% Net NPA * 0.80% 0.12% 0.19% 0.28% 0.45% 0.28% 0.44% 0.43% 0.63% 0.65% NPA provisioning coverage. 79% 89% 83% 76% 71% 77% 74% 70% 60% 60% All figures till including FY17 are as per previous GAAP, whereas for FY18 onwards are as per IndAS across periods are not comparable. * As per the RBI regulations, NNPA numbers for upto FY15 are at 6 months overdue, FY16 are at 5 months overdue, FY17 are at 4 months overdue and FY18 onwards are at 3 months overdue. Hence NPA Back18#19Product suite Consumer 1. Consumer Durable Loans 2. Digital Product Loans (E) 3. Lifestyle Product Loans 4. Lifecare financing 5. EMI Cards 6. Retail Spend Financing 7. 2-Wheeler & 3-Wheeler Loans 8. Personal Loan Cross-Sell 9. Salaried Personal Loans (E) 10. E-Commerce - Consumer Finance 11. Retailer Finance 12. Health EMI Card SME 1. Unsecured Working Capital Loans (E) 2. Loans to self employed and Professionals (E) 3. Secured Enterprise Loans 4. Used-car financing BAJAJ FINANCE LIMITED Commercial 1. Loan against securities 2. IPO financing 3. ESOP financing 4. Vendorfinancing to auto component manufacturers 5. Financial Institutions Lending 6. Light Engineering Lending 7. Specialty Chemicals Lending Rural 1. Consumer Durable Loans 2. Digital Product Loans 3. Lifestyle Product Loans 4. Personal Loans Cross Sell 5. Salaried Personal Loans 6. Gold Loans 7. Loans to Professionals Deposits 1. Retail Term Deposits 2. Corporate Term Deposits 3. Systematic Deposit Plan Partnerships & Services 1. Life Insurance Distribution 2. General Insurance Distribution 3. Health Insurance Distribution 4. Pocket Insurance (E) 5. Co-Branded Credit Card 6. Co-Branded Wallet 7. Financial Fitness Report BAJAJ HOUSING FINANCE LIMITED 1. Loan Against Property 1. Developer Finance 1. Salaried Home Loans (E) 2. Salaried Loan Against Property 2. Self Employed Home Loans 3. Lease Rental Discounting 1. Loan Against Property 2. Home Loans 3. Secured Enterprise Loans 1. Property search services 2. Property Fitness Report 1. Depository services 2. Margin Trading Facility 3. Spread Financing 4. Brokerage account BAJAJ FINANCIAL SECURITIES LIMITED New Product (E) Also available through digital channels Back 19#20Executive summary - Consolidated Overview Subsidiaries Treasury Credit Quality 33-year-old non bank with a demonstrated track record of profitable growth B BAJAJ FINSERV USD 1 INR 75 • Diversified financial services company focused on Consumer, Rural, SM E, Commercial, Mortgages and Payments Focused on mass affluent client with a strategy to cross sell • Strong focus on deposits acceptance and fee product distribution Present in 1,049 urban locations and 1,359 rural locations in India with over 1,14,400 + points of sale Large customer franchise of 42.95 MM with loans Amongst the largest new loan acquirers in India (1.75 MM in Q1 FY21) AUM mix of Consumer: Rural: SME: Commercial: Mortgages stood at 37% 9% 13% 7% 34% as of 30 June 2020 AUM of $ 18,407 MM as of 30 June 2020 and a post tax profit of $ 128 MM in Q1 FY21. Capital adequacy ratio (including Tier II capital) stood at 26.4% as of 30 June 2020. Tier I capital stood at 22.6% • 100% shareholding in Bajaj Housing Finance Limited • 100% shareholding in Bajaj Financial Securities Limited. • Strategy is to create a balanced mix of wholesale and retail borrowings Borrowings of $ 16,149 MM with a mix of 40: 39: 17: 4 between money markets, banks, deposits & ECB as of 30 June 2020 • Consolidated Gross and Net NPA as of 30 June 2020 stood at 1.40% and 0.50%, respectively • Provisioning coverage ratio of 65% as of 30 June 2020 • Standard assets provisioning of 273 bps (ECL stage 1 & 2) under Ind AS as against requirement of ~40 bps as per RBI and NHB. This includes contingency provision of $ 313 MM for COVID-19. Excluding the same, standard assets provisioning stood at 101 bps. Back 20#21- Executive summary – Bajaj Finance Limited Overview • · B BAJAJ FINSERV USD 1 INR 75 Focused on Consumer, Rural, SM E, Commercial and Payments lines of businesses Strategic business unit organization design supported by horizontal common utility functions to drive domain expertise, scalability. and operating leverage Focused on cross sell, customer experience and product & process innovations to create a differentiated & profitable business model AUM mix of Consumer: Rural: SM E: Commercial: Mortgage (residual) stood at 47% 12% 17% 9% 15% as of 30 June 2020 Consumer business Payments • AUM of $14,211 MM as of 30 June 2020 and a post tax profit of $ 116 MM in Q1 FY21 . Present in 1,049 locations with 89,900+ active distribution points of sale as of 30 June 2020 Largest consumer electronics, digital products & lifestyle products lender in India, 2-wheeler financing business disbursed 67K accounts in the quarter (degrowth of 78% YOY) • 3-wheeler financing business disbursed 5K accounts in the quarter (degrowth of 87% YOY) Amongst the largest personal loan lenders in India • EMI Card franchise stood at 21.5 MM cards in force (CIF) . • Bajaj Finserv - RBL Bank co-branded credit card CIF stood at 1.80 MM as of 30 June 2020 Bajaj Finserv Mobikwik app has 15.7 MM users as of 30 June 2020 who have linked their EMI card to the wallet Rural business Highly diversified lender in rural markets offering 10 loan products across consumer, SME & mortgages business categories. Operates with a unique hub and spoke business model • Geographic presence across 1,359 towns and villages with retail presence across 19,600 + points of sale Back 21#22Executive summary - Bajaj Finance Limited SME Business . Offers unsecured working capital loans to SM E and self-employed professionals . • Secured offerings include enterprise loans against property and financing against used car Commercial business Treasury B BAJAJ FINSERV USD 1 INR 75 • Focused on affluent SM Es (average sales of $2 to 2.25 MM) with established financials & demonstrated borrowing track record . Offers short, medium and long term financing to mid market corporates Offers a range of structured products collateralized by marketable securities or mortgage • Offers financing against shares, mutual funds, insurance policies and deposits Strategy is to create a balanced mix of wholesale and retail borrowings with a focus on long term borrowings Borrowings stood at $ 12,762 MM with a mix of 43: 31: 21: 5 between money markets, banks, deposits & ECB as of 30 June 2020 Credit Quality . Gross and Net NPA as of 30 June 2020 stood at 1.75% and 0.61%, respectively Credit Rating . . Provisioning coverage ratio of 65% as of 30 June 2020 Standard assets provisioning of 332 bps (ECL stage 1 & 2). This includes contingency provision of $ 301 MM for COVID-19. Excluding the same, standard assets provisioning stood at 122 bps. • Credit rating for long term borrowing is AAA/ Stable by CRISIL, ICRA, CARE & India Ratings . • Credit rating for short term borrowing is A1+ by CRISIL, ICRA & India Ratings • Credit rating for FD program is FAAA/Stable by CRISIL & MAAA (Stable) by ICRA Long term issuer credit rating of BB+/ Stable and short term rating of B by S&P Global 22#23Executive summary - Bajaj Housing Finance Limited Bajaj Housing Finance Limited B • A 100% subsidiary of Bajaj Finance Limited, registered with National Housing Bank as a Housing Finance Company BAJAJ FINSERV USD 1 INR 75 Offers full range of mortgage products such as home loans, loan against property and lease rental discounting to salaried & self employed customers. It also offers construction finance and inventory finance to credit worthy developers. • Focused on mass affluent and above customers (salaried and self employed) • AUM of $4,398 MM as of 30 June 2020 and a post tax profit of $ 12 MM for Q1 FY21 • Capital adequacy ratio (including Tier II capital) stood at 25.94% as of 30 June 2020 Home Loans Loan Against Property . • Offers home loans to salaried customers for an average ticket size of approximately $ 56,000 Focused on developing sales finance business by leveraging existing developer finance relationships and through tie-ups with new project launches Currently present across 32 locations in India Offers loan to mass affluent and above self employed customers for an average ticket size of approximately $ 64,000 Strategy is to sell LAP product to existing customers only via direct to customer channel • Currently present across 15 locations in India Rural • • Offers home loans and loans against property to salaried and self-employed customers with an average ticket size of approximately $24,000 for home loans and $16,000 for loan against property Hub and spoke strategy through branch network and ASSC tie ups Currently present across 73 locations in India Back 23#24- Executive summary – Bajaj Housing Finance Limited Lease Rental Discounting • B BAJAJ FINSERV USD 1 = INR 75 Offers loan against lease rentals to high net worth individuals and developers on commercial property leased mainly to corporate tenants • All lease rental discounting transactions are backed by rentals through escrow mechanism • Ticket size of lease rental discounting ranges from $ 1-25 MM with an average ticket size of approximately $ 3 MM • Currently present across 8 locations in India (Mumbai, Delhi, Bangalore, Pune, Ahmedabad, Chennai, Kolkata and Hyderabad) Developer Financing • Offers construction finance and inventory finance mainly to category A and A+ developers in India • Average ticket size ranges between $ 2-5 MM • Currently present in 8 locations (Mumbai, Bangalore, Pune, Ahmedabad, Chennai, Kolkata, Hyderabad and Surat) Credit Quality Treasury ● • · Gross NPA and Net NPA, recognized as per extant NHB prudential norms and provisioned as per Expected Credit Loss (ECL) method prescribed in Ind AS, as of 30 June 2020 stood at 0.08% and 0.05% respectively Strategy is to create balanced and sustained mix of borrowings Borrowings stood at $ 3,387 MM with a mix of 69 : 31 between banks and money arkets as of 30 June 2020 Credit Rating • Credit rating for long term borrowing is AAA/Stable by CRISIL & IND AAA/Stable by India Ratings Credit rating for short term borrowing is A1+ by CRISIL & IND A1+ by India Ratings Back 24#25B BAJAJ FINSERV il Section 03 Financial performance - Q1 FY21 3.1 3.2 Financial statement summary - Consolidated Financial statement summary - Bajaj Finance Limited 3.3 Financial statement summary - Bajaj Housing Finance Limited Back 25#26Financial statement summary - Consolidated BAJAJ B FINSERV USD 1 INR 75 Values in MM Financials snapshot Q1 FY21 Q1 FY20 Yo Y FY20 FY19 Yo Y Assets under management 18,407 17,186 7% 19,620 15,452 27% Assets under finance 17,649 16,682 6% 18,850 15,002 26% Interest income 772 680 14% 3,063 2,180 40% Fee and other income 79 83 -5% 384 247 55% Net gain on fair value changes on investment 35 11 218% 72 40 80% Total Income 887 774 14% 3,518 2,467 43% Interest expenses 333 282 18% 1,263 883 43% Net Interest Income 554 493 12% 2,255 1,584 42% Operating Expenses 154 172 -11% 755 560 35% Loan losses and provisions (ECL stage 1 & 2) 191 17 1000% 176 35 407% Loan losses and provisions (ECL stage 3 & write off) 34 56 -39% 348 165 110% Profit before tax 175 247 -29% 976 824 18% Profit after tax 128 159 -19% 702 533 32% Ratios Operating expenses to Net Interest Income 27.9% 35.0% 33.5% 35.3% Loan loss to average AUF* 1.23% 0.46% 3.10% 1.57% Return on Average Assets* 0.7% 1.0% 4.1% 4.2% Return on Average Equity 2.9% 5.9% 20.2% 22.5% Not annualized Back 26#27Financial statement summary - Bajaj Finance Limited B BAJAJ FINSERV USD 1 = INR 75 Values in MM Financials snapshot Q1 FY21 Q1 FY20 Yo Y FY20 FY19 Yo Y Assets under management 14,211 14,393 -1% 15,480 13,156 18% Assets under finance 13,860 13,955 -1% 15,122 12,691 19% Interest income 680 619 10% 2,756 2,012 37% Fee and other income 75 79 -5% 361 274 32% Net gain on fair value changes on investment 32 9 234% 61 34 79% Total Income 787 707 11% 3178 2,320 37% Interest expenses 265 240 10% 1048 792 32% Net Interest Income 522 468 12% 2,130 1,528 39% Operating Expenses 146 163 -11% 715 527 36% Loan losses and provisions (ECL stage 1 & 2) 185 16 1035% 164 32 416% Loan losses and provisions (ECL stage 3 & write off) 34 56 -39% 343 165 108% Profit before tax 158 233 -32% 908 805 13% Profit after tax 116 150 -23% 651 519 25% Ratios Operating expense to Net Interest Income 27.9% 34.8% 33.6% 34.5% Loan loss to Average AUF* 1.51% 0.54% 3.65% 1.73% Return on Average Assets* 0.8% 1.1% 4.7% 4.6% Return on Average Equity* * Not annualized 2.7% 5.6% 19.0% 22.0% Back 27#28Financial statement summary - Bajaj Housing Finance Limited B BAJAJ FINSERV USD 1 = INR 75 Values in MM Financials snapshot Q1 FY21 Q1 FY20 Yo Y FY20 FY19 Yo Y Assets under management 4,398 2,899 52% 4,361 2,342 86% Assets under finance 3,790 2,727 39% 3,730 2,311 61% Interest income 92 61 51% 307 133 131% Fee and other income 5 CO 6 -19% 36 16 128% Net gain on fair value changes on Investments 4 1 145% 10 LO 85% Total Income 101 69 47% 353 154 129% Interest expenses 68 42 62% 215 91 136% Net Interest Income 32 26 23% 137 63 119% Operating Expenses 10 11 -10% 45 40 14% Loan losses and provisions (ECL stage 1 & 2) 6 1 450% 11 3 291% Loan losses and provisions (ECL stage 3 & write off) 0 0 0% LO 5 0 1167% Profit before tax 17 14 16% 76 20 281% Profit after tax 12 9 31% 56 15 283% Ratios Operating expense to Net Interest Income 30.5% 41.4% 32.9% 63.1% Loan loss to Average AUF* 0.16% 0.05% 0.55% 0.24% Return on Average Assets* 0.3% 0.4% 1.9% 1.1% Return on Average Equity* 1.6% 1.9% 9.1% 4.2% Back 28 * Not annualized#295 4 Section 04 Asset liability management BAJAJ B FINSERV Conservative leverage standards - 4.1 Bajaj Finance Limited Resilient business model - 4.2 4.3 4.4 4.4 Consolidated Behaviouralized ALM as of 30 June - Bajaj Finance Limited Behaviouralized ALM as of 30 June Bajaj Housing Finance Limited Disciplined ALM Management - Bajaj Finance Limited Liability mix over the last 9 years 4.5 Bajaj Finance Limited Back 29#30Conservative leverage standards - Bajaj Finance Limited BAJAJ B FINSERV 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 6.8! 6.6 24.7% 25.0% 26.4% [6.4 6.2 6.3 16.3 22.6% 22.0% 21.3% 20.7% 20.3% 5.4 5.3 19.5% 19.1% 5.1 18.0% 4.7 * 17.5% 19.7% 18.7% 16.2% 16.1% 16.3% 15.0% 14.6% 14.2% 5.7% 5.0% 4.4% 3.8% 3.7% 3.8% 3.3% 3.4% 3.0% 2.5% Mar'12 Mar'13 Mar'14 Mar'15 -Tier 2 capital # Tier 1 capital * Standalone leverage is approximately 4.0X as of 30 June 2020 # Capital Adequacy Ratios (CRAR) are on standalone basis March '19 onwards numbers are as per Ind AS Mar'16 Mar'17 ―Total capital adequacy (CRAR) # Mar'18 Mar '19 Mar 20 June'20 -Leverage Ratio Leverage Threshold denotes point at which the Company initiated its capital raising plan in last 9 years Back 30#31Resilient business model - Consolidated B BAJAJ FINSERV 47.0% 46.0% 44.6% 45.0% 43.69% 43.1% 41.4% 41.8% 38.4% 36.0% 35.3% 35.39% 32.9% 33.3% 29.9% 33.50% 28.4% 27.2% 27.90% 26.4% 9.16% 9.74% 9.85% 9.87% 9.47% 9.00% 8.24% 8.27% 8.39% 8.17% 4.2% 4.1% 3.6% 3.3% 3.5% 3.7% 3.9% 4.1% 4.10% 2.80% @ @ Mar'12 Mar'13 Mar'14 Mar'15 Mar'16 Mar'17 # Mar'18 Mar '19 Mar 20 Jun '20 -COF ROA -Fee Income to PBT -Operating Leverage © Mar '19 onwards numbers are as per Ind AS. Jun 20 number is for the quarter # Post Ind AS, Fee income to PBT represents non-loan fees and commission income as a % of Profit Before Tax Back 31#32Behaviouralized ALM as of 30 June 2020 - BFL BAJAJ B FINSERV USD 1 = INR 75 Values in MM Particulars 1m >1 to 2m >2 to 3 m >3 to 6 m >6m to 1 yr >1 to 3 yr >3 to 5 yr >5 yr Total Cash, Cash Equivalents & Investments 1,979 67 0 1 42 232 58 743 3,121 Advances 809 657 632 1,533 2,311 5,219 2.438 879 14,477 Other inflows 511 CO 6 43 127 28 284 0 599 1,598 Total Inflows (A) 3,299 729 675 1,660 2.381 5,735 2,497 2,221 19,197 Cumulative Total Inflows (B) 3,299 4,028 4,704 6,364 8,745 14,479 16,976 19,197 0 Borrowings 281 841 393 971 1,784 5,803 1,676 1,520 13,270 Capital and Reserves and Surplus 4,479 4,479 Other Outflows 543 18 27 181 90 144 71 375 1.449 Total Outflows (C) 824 859 420 1,153 1,874 5,947 1,747 6,373 19,197 Cumulative Total Outflows (D) 824 1,684 2,104 3,256 5,130 11,078 12,824 19,197 0 Mismatch (E = A-C) 2,475 (130) 255 508 507 (213) 750 (4,152) Cumulative mismatch (F= B-D) i 2,475 i 2,345 2,600 3,107 3,615 3,402 4,152 Cumulative mismatch as a % (F/D) 300% 139% 124% 95% 70% 31% 32% 0% Permissible cumulative GAP % -20% Additional borrowings possible 3,299 * As per previous GAAP -15% 1,858 Back 32#33Behaviouralized ALM as of 30 June 2020 - BHFL BAJAJ B FINSERV USD 1 = INR 75 Values in MM Particulars 1 m >1 to 2 m >2 to 3 m >3 to 6 m >6m to 1 yr >1 to 3 yr >3 to 5 yr >5 to 7 yr >7 to 10 yr > 10 yr Total Cash & Investments 307 20 20 347 Advances 82 60 61 176 324 947 557 396 440 784 3,829 Other inflowS 79 2 3 4 368 102 102 67 7 13 748 Total Inflows (A) 469 83 84 180 692 1,049 659 463 448 797 4,924 Cumulative Total Inflows (B) 469 552 636 816 1,508 2,557 3,216 3,680 4.127 4,924 0 Borrowings 58 9 25 153 648 1492 695 171 10 34 3,295 Capital Reserves and Surplus 752 752 Other Outflows 73 18 19 49 137 15 0 333 233 877 Total Outflows (C) 131 27 44 202 785 1.507 695 171 344 1,018 4,924 Cumulative Total Outflows (D) 131 158 202 404 1,190 2.696 3,392 3,562 3,906 4,924 0 Mismatch (E = A - C) 338 56 40 (22) (93) (458) (36) 293 104 (221) Cumulative mismatch (F = B-D) 338 394 433 412 318 (139) (175) 117 221 0 Cumulative mismatch as % (F/D) 257% 249% 214% 102% 27% -5% -5% 3% 6% 0% Permissible cumulative GAP % -15% Additional borrowings possible 420 * As per previous GAAP -15% 164 Back 33#34Disciplined ALM Management - Bajaj Finance Limited -Cumulative gap upto 1 month Cumulative gap upto 12 month -Permissible limit 141% 119% 120% 96% 220% BAJAJ B FINSERV 300% 61% 48% 50% 71% 36% 36% 70% 51% 54% 57% 16% 38% 44% 4% -15% -15% -15% -15% -15% -15% -15% -15% -15% -15% * Mar'12 Mar '13 Mar '14 Mar'15 Mar '16 Mar '17 Mar '18 Mar'19 Mar/20 Jun'20 * RBI has changed permissible limit for cumulative gap up to 1-month bucket to -20% from June'20 onwards. Back 34#35Liability mix over the last 9 years - Bajaj Finance Limited 5% 5% 9% 8% 10% 8% 8% 13% 4% 3% 3% 4% 6% 5% 3% 7% BAJAJ B FINSERV 4% 5% 34 3% 4% 4% 4% 33% 31% 38% 35% 25% 38% 35% 38% 40% 43% 30% 31% 58% 58% 54% 34% 48% 53% 31% 35% 21% 21% 15% 12% 8% 0% 0% 1% Mar'12 Mar'13 Mar'14 4% Mar'15 6% Mar'16 Mar'17 Mar'18 Mar'19 ■Deposits ■Bank Loans (incl. CC/OD/W CDL) NCD Subordinate Debt ■Short term borrowings Mar 20 ECB Jun '20 * Standalone borrowing mix Back 35#365.1 Custom er franchise Section 05 Customer franchise and distribution reach Geographic presence 5.3 Strong distribution reach BAJAJ B FINSERV Back 36#37Customer franchise Q1 FY20 36.94 MM 29.09 MM Total Franchise Credit segment filter Q4 FY20 * BAJAJ B FINSERV 42.60 MM 33.47 MM 28.00 M M Overall Cross sell franchise 32.32 MM 25.18 MM Non delinquent customers 28.48 MM 21.85 MM Cross sell franchise 24.13 MM * The customer franchise waterfall has been kept static due to moratorium and will be updated in Q3 FY21 New to Bajaj Finance Customers Q4 FY19 19,17,490 Q1 FY20 24,55,827 Q2 FY20 19,21,238 Q3 FY20 24,61,473 Q4 FY20 19,00,989 Q1 FY21 5,32,441 Back 37#38Geographic presence Map not to scale Blue dots indicates newly opened locations in Q1 FY21 B BAJAJ FINSERV 31 Mar 31 Mar 31 Mar 31 Mar 30 Jun Geographic Presence 2017 2018 2019 2020 2020 Urban 377 730 927 1,035 1,049 Rural 538 602 903 1.357 1,359 Of which rural lending branches 177 219 347 527 527 Of which rural lending franchise 361 383 556 830 832 Total Bajaj Finance presence 915 1,332 1.830 2,392 2,408 Back 38#39Strong distribution reach B BAJAJ FINSERV Active distribution - points of sale 31 Mar 2017 31 Mar 2018 31 Mar 2019 31 Mar 2020 30 Jun 2020 Consumer durable stores – Urban 14,000+ 15,500+ 20,400+ 24,200+ 24,200+ Consumer durable stores - Rural 5,500+ 8,200+ 14,500+ 19,600+ 19,600+ Digital product stores 5,900+ 15,900+ 22,500+ 26,400+ 26,400+ Lifestyle retail stores 3,900+ 6,000+ 7,700+ 9,500+ 9,500+ EMI card retail spends stores 5,600+ 12,100+ 19,100+ 24,300+ 24,300+ Bajaj Auto dealers, sub-dealerships and ASSC 3,200+ 3,900+ 4,600+ 5,500+ 5.500+ Direct Sales Agents 1,500+ 2,100+ 2,800+ 4,900+ 4,900+ Overall active distribution network 39,600+ 64,300+ 91,700+ 1,14,400+ 1,14,400+ Back 39#40Section 06 Business segment wise AUM 6.1 6.2 B BAJAJ FINSERV Business segment wise AUM as of 30 June - Consolidated Business segment wise AUM as of 30 June - Bajaj Housing Finance Ltd. Back 40#41Business segment wise AUM as of 30 June 2020 - Consolidated B BAJAJ FINSERV USD 1 = INR 75 Values in MM Composition as Standalone as of Assets Under Management 30 Jun 2020 BHFL as of 30 Jun 2020 Consolidated as of 30 Jun 2020 Consolidated as of 30 Jun 2019 Growth of 30 Jun 2020 Auto Finance Business 1,707 1,707 1,454 17% 9% Sales Finance Business 1,231 1,231 1,878 -34% 7% Consumer B2C Business 3,800 96 3,896 3,319 17% 21% Rural Sales Finance Business 279 279 318 -12% 2% Rural B2C Business 1,371 1,371 1,061 29% 7% SM E Lending Business 2,413 25 2,437 2.178 12% 13% Securities Lending Business 527 528 870 -56% 3% IPO financing 341 Commercial Lending Business 810 810 784 3% 4% Mortgages 2,074 4,277 6,150 4,983 23% 34% Total 14,211 4,398 18,407 * 17,186 7% 100% Credit Card - CIF 1,798 K 1,285 K 40% EMI Card - CIF 21.5 MM 19.8 MM 9% Wallets 15.7 MM 10.0 MM 57% Back 41 * Includes short term IPO financing book of $ 341 MM - adjusted for this total AUM growth is 9%#42Break-up of Mortgages AUM as of 30 June 2020 Bajaj Housing Finance Limited B BAJAJ FINSERV USD 1 = INR 75 Values in MM Consolidated Assets Under Management Composition as 30 June 2020 30 June 2019 Grow th 30 June 2020 30 June 2019 Growth of 30 June 2020 Home Loans 2,874 1,887 52% 3,552 2,714 31% 58% Loan against property 532 336 58% 1,538 1,492 3% 25% Lease rental development. 414 303 37% 534 376 42% 9% Developer Finance 238 137 73% 250 186 34% 4% Rural 219 144 52% 275 214 29% 4% Total 4,277 2,807 52% 6.150 4,983 23% 100% Bajaj Housing Finance Limited Consolidated Home loan portfolio customer categorisation Composition as of 30 June 2020 30 June 2019 Grow th 30 June 2020 30 June 2019 Growth 30 June 2020 Home Loan to Salaried 2,645 1,679 58% 3,027 2,131 42% 83% Home Loan to Self Employed Home Loan to Professional 170 155 10% 424 483 -12% 12% 154 108 43% 203 163 25% 5% Salaried focused home loans acquisition strategy (93% of Q1 FY21 acquisition) Back 42#43☐ Section 07 Update on credit quality 7.1 Provisioning Coverage - consolidated 7.2 NPA movement - consolidated 7.3 ECL summary - consolidated 7.4 ECL summary - Bajaj Housing Finance Limited BAJAJ B FINSERV Back 43#44Provisioning Coverage - Consolidated B BAJAJ FINSERV USD 1 INR 75 Values in MM Consol AUM PCR GNPA % NNPA % Assets Under Management GNPA NNPA 30 Jun 2020 (%) 30 Jun 19 31 Mar 20 30 Jun 20 30 Jun 19 31 Mar 20 30 Jun 20 Auto Finance Business 1,707 110 40 63% 5.19% 6.47% 5.80% 2.14% 3.08% 2.21% Sales Finance Business 1,231 15 LO 5 68% 1.16% 1.33% 1.03% 0.27% 0.35% 0.33% Consumer B2C Business 3,896 51 12 76% 1.63% 1.62% 1.36% 0.45% 0.49% 0.32% Rural Sales Finance Business 279 1 0 77% 0.97% 0.55% 0.16% 0.31% 0.10% 0.04% Rural B2C Business 1,371 18 CO 6 68% 1.63% 1.53% 1.30% 0.61% 0.51% 0.42% SME Lending Business 2,437 37 11 70% 1.64% 1.70% 0.89% 0.35% 0.56% 0.27% Securities Lending Business 528 0% 0.00% 0.00% Commercial Lending Business Mortgages 810 0 0 10% 0.61% 0.03% 0.04% 0.26% 0.03% 0.03% 6,150 27 17 38% 1.19% 0.53% 0.69% 0.86% 0.34% 0.43% Total 18,407 258 91 65% 1.60% 1.61% 1.40% 0.64% 0.65% 0.50% GNPA reduced by 21 bps on a sequential basis and 20 bps Yo Y; NNPA reduced by 15 bps on a sequential basis and 14 bps Yo Y Back 44#45NPA movement - Consolidated B BAJAJ FINSERV USD 1 = INR 75 Values in MM Particulars Assets Under Management Jun '19 Sep '19 Dec'19 Mar'20 Jun'20 17186 18071 19346 19620 18407 Opening GNPA (A) Roll Forward into NPA (i) Restructuring (ii) 241 279 295 314 315 93 104 123 133 18 1 1 2 6 0 Total Slippages (B = i + ii) 94 105 125 138 19 Roll back to standard (iii) 21 27 26 43 16 Recoveries (iv) 7 9 8 2 6 Realisation on sale of NPA receivables* (v) 3 2 1 Write offs as per policy (vi) 26 25 51 89 53 Write offs on sale of NPA receivables (vii). 26 20 2 Total recoveries and write-offs (C = iii + iv + v + vi + vii) 55 89 106 137 75 Net slippages (B - C) 39 16 19 1 -57 Gross NPA (A + B-C) 279 295 314 315 258 GNPA % 1.60% 1.61% 1.61% 1.61% 1.40% NNPA % PCR % 0.64% 0.65% 0.70% 0.65% 0.50% 61% 60% 57% 60% 65% *Portfolio sale is on cash basis Back 45#46ECL summary - Consolidated B BAJAJ FINSERV Assets categorization Jun '19 Sep '19 Dec '19 Mar'20 Jun'20 Stage 1 & 2 (represents standard assets) 98.40% 98.39% 98.39% 98.39% 98.60% Stage 3 (represents GNPA) 1.60% 1.61% 1.61% 1.61% 1.40% Summary of stage wise assets and provision for impairment allowance Assets and impairment allowance Jun '19 Sep'19 Dec '19 Mar'20 USD 1 = INR 75 Values in MM Jun '20 Gross Stage 1 & 2 assets* (A) 17.143 18,074 19,138 19.227 18,195 ECL Provision Stage 1 & 2 (B) 148 165 192 307 497 Net Stage 1 & 2 assets (C = A-B) 16,995 17.908 18,945 18,920 17,698 ECL Provision % Stage 1 & 2 assets (D = B/A) 0.86% 0.91% 1.01% 1.59% 2.73% Gross Stage 3 assets (E) @ 279 295 314 315 258 ECL Provision Stage 3 (F) 169 177 178 190 168 Net Stage 3 assets (G = E-F) 110 118 136 125 91 Coverage Ratio % Stage 3 assets (H= F/ E) 61% 60% 57% 60% 65% Overall coverage ratio 1.82% 1.86% 1.90% 2.54% 3.60% * Gross stage 1 & 2 assets represent loans balance as per Ind AS after adjusting for the impact of am ortisation of fees earned and acquisition cost incurred including other assets like security deposits, advance to dealer, receivable from related parties, capital advances etc @ Gross Stage 3 assets represents loans balance as per Ind AS after adjusting for the impact of (i) am ortisation of fees earned and acquisition cost incurred and (ii) overdue interest considered recoverable under Ind AS and other receivables considered as non-performing as at the end of respective periods. Back 46#47ECL summary - Bajaj Housing Finance Limited BAJAJ B FINSERV ECL categorization Jun'19 Sep'19 Dec'19 Mar'20 Jun'20 Stage 1 & 2 (represents standard assets) 99.94% 99.94% 99.93% 99.92% 99.92% Stage 3 (represents GNPA) 0.06% 0.06% 0.07% 0.08% 0.08% Summary of stage wise assets and ECL provisioning USD 1 = INR 75 Values in MM Financial Assets & ECL provision Jun'19 Sep'19 Dec'19 Mar'20 Jun'20 Gross Stage 1 & 2 assets* (A) 2,747 3,131 3,538 3,760 3.832 ECL Provision Stage 1 & 2 (B) 5 5 6 15 21 Net Stage 1 & 2 assets (C = A-B) 2,742 3,126 3,532 3.745 3,811 ECL Provision % Stage 1 & 2 assets (D = B/A) 0.16% 0.16% 0.16% 0.40% 0.54% Gross Stage 3 assets (E) 1.7 1.8 2.7 3.2 3.2 ECL Provision Stage 3 (F) 0.6 0.8 0.8 1.2 1.2 Net Stage 3 assets (G = E-F) 1.2 1.0 1.8 2.0 2.0 Coverage Ratio % Stage 3 assets (H= F/ E) 32% 45% 32% 38% 38% ECL/ Total Assets 0.18% 0.18% 0.19% 0.43% 0.58% * Gross stage 1 & 2 assets represent loans balance as per Ind AS after adjusting for the impact of am ortisation of fees earned and acquisition cost incurred including other assets like security deposits, receivable from related parties, capital advances etc @ Gross Stage 3 assets represents Loans balance as per Ind AS after adjusting for the impact of (i) amortisation of fees earned and acquisition cost incurred and (ii) overdue interest considered recoverable under Ind AS and other receivables considered as non-performing as at the end of respective periods. Back 47#48BAJAJ FINANCE LIMITED Q1 FY21 Investor Presentation Thank You B BAJAJ FINSERV Back#49Disclaimer B BAJAJ FINSERV This presentation has been prepared by and is the sole responsibility of Bajaj Finance Limited (together with its subsidiaries, referred to as the "Company" or "Bajaj Finance". By accessing this presentation, you are agreeing to be bound by the trailing restrictions. This presentation does not constitute or does not intend to constitute or form part of any offer or invitation or inducement to sell, or any solicitation of any offer or recommendation to purchase, any securities of the Company, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contract or commitment therefor. In particular, this presentation is not intended to be a prospectus or offer document under the applicable laws of any jurisdiction, including India. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. Such information and opinions are in all events not current after the date of this presentation. There is no obligation to update, modify or amend this communication or to otherwise notify the recipient if information, opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate. However, the Company may alter, modify or otherwise change in any manner the content of this presentation, without obligation to notify any person of such change or changes. These materials are being given solely for your information and may not be copied, reproduced or redistributed to any other person in any manner. The distribution of these materials in certain jurisdictions may be restricted by law and persons into whose possession these materials comes should inform them selves about and observe any such restrictions. Certain statements contained in this presentation that are not statements of historical fact constitute "forward-looking statements." You can generally identify forward-looking statements by terminology such as "aim", "anticipate", "believe", "continue", "could", "estimate", "expect", "intend", "may", "objective", "goal", "plan", "potential", "project", "pursue", "shall", "should", "will", "would", or other words or phrases of similar import. These forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or other projections. Important factors that could cause actual results, performance or achievements to differ materially include, among others: (a) material changes in the regulations governing the Company's businesses; (b) the Company's ability to comply with the capital adequacy norms prescribed by the RBI; (c) decreases in the value of the Company's collateral or delays in enforcing the Company's collateral upon default by borrowers on their obligations to the Company; (d) the Company's ability to control the level of NPAs in the Company's portfolio effectively; (e) internal or external fraud, operational errors, systems malfunctions, or cyber security incidents; (f) volatility in interest rates and other market conditions; and (g) any adverse changes to the Indian economy. This presentation is for general information purposes only, without regard to any specific objectives, financial situations or informational needs of any particular person. The information contained in this presentation is only current as of its date and the Company does not undertake any obligation to update the information as a result of new information, future events or otherwise. 49