Bajaj Finserv Ltd M&A Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Rohan Mehta - Ficom Family Office - Analyst : Hello sir, thank you so much for taking my question. So I have two questions. So first is, what is the strategic rationale for Bajaj Holdings and Jamnalal Sons acquiring the remaining stake in the insurance company rather than Bajaj Finserv itself? And how does this align with Bajaj Finserv's long-term vision?

Question: Rohan Mehta - Ficom Family Office - Analyst : Sure, sure, sir. And my second question is, what role can we expect Mr. Rajeev Jain to play in Bajaj Finserv post March 31? And what has been the communication in Finserv regarding his involvement in Bajaj Finserv and juggles its possible role in Bajaj Finance alongside?

Question: Rohan Mehta - Ficom Family Office - Analyst : Sure, absolutely, sir. And last question is on the listing of BAGIC and BALIC, have you thought about appointing any investment banker? Or any timeline do you have as on date?

Question: Rohan Mehta - Ficom Family Office - Analyst : Sure, sir. Thank you so much for taking my question.

Question: Avinash Singh - Emkay Global Financial Services Ltd - Analyst : Yeah, hi, good evening. Thanks for the opportunity. A couple of questions. The first one is that particularly in BAGIC, you have a scenario of excess capital? And given the sort of the different positions taken by the two partners you have not had kind of a very clear path. Now does this kind of a REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 19, 2025 / 11:15AM, BJFS.NS - Bajaj Finserv Ltd M&A Call joint venture agreement ending provide you some clarity around what you want to do with the excess capital, even considering a reasonable amount of growth because you are a reasonably profitable company as well, your capital or solvency capital in your BAGIC seems excellent. So any sort of a thought on that? And second, I mean, of course, you answered it very clearly on the IPO, the timeline. But not about timeline, as and when IPO happens, as and when, will there be kind of any idea at this point, who will be the kind of a diluting promoter or investor? I mean, is it the Bajaj Finserv that will dilute or will it keep sort of at a 74%, 75% and that dilution will happen from the other two investors or promoters. These are the two questions? Thanks.

Question: Avinash Singh - Emkay Global Financial Services Ltd - Analyst : Thank you.

Question: Rahil Shah - HSBC - Analyst : Hello.

Question: Bhavesh Kanani - Svan Investments - Analyst : Thank you. Thank you for taking my question. Going back to the first question that was asked, some more color on that in the sense that we would have had infused money into Bajaj Finserv. And then in turn, Bajaj Finserv would have bought out Allianz stake. The merits of this structure versus what has been done if you can help us understand that.

Question: Bhavesh Kanani - Svan Investments - Analyst : Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 19, 2025 / 11:15AM, BJFS.NS - Bajaj Finserv Ltd M&A Call

Question: Rahil Shah - HSBC - Analyst : Oh hello. Thanks for giving the opportunity. Sorry, I dropped in between, but can you clarify on one thing? Will the funding be self-funded by all the entities?

Question: Rahil Shah - HSBC - Analyst : Sure. So once this transaction is completed, can we expect our high dividend payout ratios from the sums or that will remain unaffected?

Question: Rahil Shah - HSBC - Analyst : Sure. And just last, again, a clarification on the solvency ratio and the risk-based capital regime. So will it decrease from the current levels? Or what's your assessment? Or I mean, ideally, the general sense is that it should increase. Can you give some sense? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 19, 2025 / 11:15AM, BJFS.NS - Bajaj Finserv Ltd M&A Call

Question: Rahil Shah - HSBC - Analyst : Okay, sure. Thank you.

Question: Nidhesh Jain - Investec India - Analyst : Thanks for the opportunity. The first question is in terms of funding this transaction, so we see that there is around INR18,000 crores of investment, which is sitting on Bajaj Holdings' balance sheet. So that will be monetized to fund this transaction?

Question: Nidhesh Jain - Investec India - Analyst : Okay. Sir, secondly, in terms of operations, I think there has been some reinsurance arrangement with Allianz that Bajaj, both are similar entities, have been engaging with in the past. So do you see any impact on our profitability because of those -- those arrangements will continue in the future as it is? Or do you see any changes to that?

Question: Nidhesh Jain - Investec India - Analyst : Sure. And then next is that was there any involvement of Allianz in terms of any other operational aspect, whether it is technology or any other operational aspect which will change.

Question: Nidhesh Jain - Investec India - Analyst : Sure, sir. And what will be the rough timelines of this deal, by when this will be completed?

Question: Nidhesh Jain - Investec India - Analyst : Sure, sir. And sir, last question is since the Allianz is planning to re-enter India and starting their insurance venture again. So do we have any

Question: Nidhesh Jain - Investec India - Analyst : Great, great. Thank you. That's it for me.

Question: Prayesh Jain - Motilal Oswal Financial Services Ltd - Analyst : Yeah, hi, sir. So firstly, like you mentioned, there shouldn't be any challenges, but any of the regulations that could be a hindrance or it could be a road block to this transaction that you would see?

Question: Prayesh Jain - Motilal Oswal Financial Services Ltd - Analyst : Okay. Sir, second question was when you spoke about the pros of getting the complete ownership. But obviously, there are pros of having a JV partner who has a global experience in terms of products, in terms of geography, underwriting, many aspects which India is still kind of at an evolving stage. Just a hypothetical question. Had this not been something which would have been pressing or time would have been an essence here for the exit that had to be given to Allianz. Would you have considered another JV partner who would be a foreign partner and or any other JV partner that you would have envisaged?

Question: Prayesh Jain - Motilal Oswal Financial Services Ltd - Analyst : Sure. And last question, sir, either in BAGIC or BALIC, any product categories that would earlier not been really kind of got into and which now you can get into. Is there any thought that is different, now?

Question: Prayesh Jain - Motilal Oswal Financial Services Ltd - Analyst : Got that. Thank you so much sir.

Question: Ankit Batra - India Ratings - Analyst : So basically, the question was on the funding side only, you said that the leverage is not allowed to be built up to acquire this particular stake in the insurance entity. So just wanted to kind of get some understanding because it's a substantial amount. So at the holdco at the BHIL level also, it's a substantial amount, which will be required and 1% stake acquisition at Bajaj Finserv level. So just wanted to get some color around the source of funds, if not external debt, then how will this get arranged?

Question: Ankit Batra - India Ratings - Analyst : So sir, when you say the Holding company, it is the BHIL level?

Question: Ankit Batra - India Ratings - Analyst : Okay, sir. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 19, 2025 / 11:15AM, BJFS.NS - Bajaj Finserv Ltd M&A Call

Question: Deepinder Bhatia - Bayard Asset Management - Analyst : Thank you. First of all, Sreeni and team, congratulations on a really large and substantial deal that willprovide us even more significant exposure across the group to this prized asset. My question is the first one, I'm not sure has been answered. The second one, I think you've touched on already. The first question is strategically, in the last couple of quarters, you had already started signalinga move towards extracting high ROIC, high ROEV on the existing core business. Is any of that direction that you had been guiding in the last couple of quarters going to change in a significant manner, either move more speedily or in any other manner given this parting of ways with your JV partner? That's my first question. And I'll just lay out my second question also here. You may have touched on this. I'm sorry, I came a little late for this call. With regard to your obligation to list any portion of the combined asset at what point in time, with what kind of deadline would you need to, if at all? And how much sharewould you need to list? And in what proportion are we likely to see the listing come through to the market? If you have any details on that, that would be great, too. Thank you.

Question: Deepinder Bhatia - Bayard Asset Management - Analyst : Do you think that some of these -- the strategic direction margin enhancement and so on, is there any reason to believe it will move more speedily or any change to the pace of that as aresult of this ownership change? Or is it really unaffected in terms of pacing and speed with which -- or the end points that you would have as your goals whether or not the ownership structure existed in its original form or in its current newly proposed form?

Question: Deepinder Bhatia - Bayard Asset Management - Analyst : Understood. Thank you very much. Congratulations again and wish you best of luck.

Question: Ajit Kumar - JM Financial Ltd - Analyst : Thank you to all the participants for joining the call and a special thanks to the management team of Bajaj Finserv for giving us the opportunity to host the call. Thank you, and good day, everyone.

Question: Ajit Kumar - JM Financial Ltd - Analyst : Thank you, all.