The Next HDFC and Bajaj Finance

The year was 1982.

India was gearing up for the Asian Games.

It was a first-of-its-kind sporting spectacle in India.

A tiny fraction of Indian households then owned television sets to watch the games. Even those who did, had the black and white sets.

The government then changed the way Indians watched TV. It allowed the import of 50,000 colour TV sets by November of that year. Each imported TV set came at a then princely sum of Rs 15,000.

Households that owned a colour TV set hosted the entire neighborhood to watch the games.

India won the cricket world cup the next year. Yet again, the households with the colour TVs were the most popular in the neighborhood.

The tradition of watching the big sporting events in this way continued in to the late 90s.

Buying a television set with a loan did not even occur to Indian households then. Nor were banks willing to lend for such products.

Banks like HDFC Bank, UTI Bank (now Axis Bank), and ICICI Bank grabbed this opportunity.

As more Indians entered the workforce, these banks offered them loans to pre-pone their household needs. Buying the first TV set, washing machine, air conditioner or even a car was no longer a long-term plan.

But a lot of this lending stayed restricted to urban areas and the salaried class.

Enter NBFCs like Bajaj Finance. They captured the opportunity in smaller towns. They made the self-employed customers their core target.

Bajaj Finance had representatives at large retailers. Limited paper work, no collateral, and easy access to credit helped consumer finance flourish in even the smallest towns and cities.

But this does not mean India's retail lending market is saturated. Far from it. More than half of India's population is still untouched by the consumer financing boom. These companies will make a lot of money before India's retail credit to GDP gets close to 25%.

India's Retail Credit Remains Grossly Underpenetrated

HDFC Bank takes less than two minutes to approve a loan. The bank asks you to fill in just seven data fields on its website.

Bajaj Finance will lure you with zero interest credit at electronics shops and e-commerce websites.

And with their strong network, they will remain formidable players in Indian consumer financing for decades!

But it is unlikely they will be the biggest winners of the consumer finance boom India will see in coming years.

I believe, payment banks could bridge the last mile access gap that banks and NBFCs have not been able to bridge.

Technology companies will eventually have access to lot more consumer data than banks ever did. Tech-enabled micro lenders may make retail credit available to the unbanked households.

Consumer finance is a key catalyst in the transformation I am calling the Rebirth of India.

I will be looking for the next HDFC and Bajaj Finance. These are stocks I like to call generational multibaggers. They can create wealth that lasts generations.

I will find more stocks like these as the Rebirth of India takes the Sensex to 100,000.

In fact, I've already identified the top 7 stocks.

I will share the details of Rebirth of India along with the 7 stocks, in an exclusive online summit, at 5 pm, on 8 August 2019.

I highly recommend you book your seat for free here.

Warm regards,


Tanushree Banerjee
Editor and Research Analyst, The 5 Minute WrapUp

PS: More than 10,000 have signed up for the Rebirth of India Mega Summit where Tanushree will reveal the biggest Money making opportunity of the generation! Don't miss it. Sign up here...