Bajaj Finance Limited

June 2011

Disclaimer
This presentation has been prepared by Bajaj Finance Limited (the Company) solely for your information and for your use. This presentation is for information purposes only without specific regards to specific objectives, financial situations or needs of any particular person and does not constitute and should not be deemed to constitute or form part of any offer or invitation or inducement to sell or issue any securities, or any solicitation of any offer to purchase or subscribe for, 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 upon in connection with, any contract or commitment therefor. The financial information in this presentation may have been re-classified and reformatted for the purposes of this presentation. You may also refer to the audited financial statements of the Company before making any decision on the basis of this information. This presentation contains statements that may not be based on historical information or facts but that may constitute forward-looking statements. These forward looking statements include descriptions regarding the intent, belief or current expectations of the Company or its directors and officers with respect to the results of operations and financial condition of the Company. These statements can be recognized by the use of words such as expects, plans, will, estimates, projects, or other words of similar meaning. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ from those in such forward-looking statements as a result of various factors and assumptions which the Company presently believes to be reasonable in light of its operating experience in recent years but these assumptions may prove to be incorrect. 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Executive Summary

Promoted by the Bajaj Auto group in 1987 Demonstrated consistent profitability track record in lending space for the last 24 years. AUM of ` 75.71 billion, with a history of disbursing over 6.00 million loans, as of FY11. Disbursed 1.57 million loans in FY11 A diversified lending business with 9 product lines focusing on consumer finance & SME business Strong distribution reach with more than 225 points of presence and more than 4,000 distribution partners and dealers across India Strategy is to focus on mass affluent customers in consumer businesses and affluent and HNI customers in small businesses, through a judicious mix of: Lower risk and lower returns products, for building scale and stability Moderate risk and higher return products, for profit maximization Stable and deep management structure with top 100 management team members having experience from leading Multi National Companies and Transnational companies.

Table of contents

Bajaj Finance Overview

Key Competitive Strengths

Strategic Overview

Financial information

Industry Overview

Annexure Portfolio Performance

Table of contents

Bajaj Finance Overview

Key Competitive Strengths

Strategic Overview

Financial information

Industry Overview

Annexure Portfolio Performance

Bajaj Group structure

Bajaj Holdings and Investment Limited

31.49%

38.69%

Bajaj Auto Limited

Auto Business Arm

Bajaj Finserv Limited

Financial Services Arm

74%

74%

100%

55.98%

Bajaj Allianz Life Insurance Company Limited

Bajaj Allianz General Insurance Company Limited

Bajaj Financial Solutions Limited

Wealth Management & Advisory

Bajaj Finance Limited

Lending

Protection and Retirals

Key Business Lines

Product

Indicative Terms, as of June 2011

Maturity : 8 12 months Repayment : EMI

Key Features
12% of the portfolio as of FY11 One of the few organized players with cutting edge technology architecture & robust risk management framework. 6% of the portfolio as of FY11 Loans to existing customer with very good credit performance track record. 26% of the portfolio as of FY11 Captive financing. Financing only Bajaj auto vehicles.

Target Customer Base

Mass Affluent and Affluent

Consumer finance

Consumer durable financing

Personal Loans Cross sell

Maturity : 12-36 months Repayment : EMI

Mass Affluent and Affluent

2 Wheeler & 3 Wheeler Finance

Maturity : 12 24 months Repayment : EMI

Mass customers

Mortgage

Small business

Maturity :60 180 months Repayment : EMI

30% of the portfolio as of FY11 Includes loan against property 10% of the portfolio as of FY11 (SBL) 4% of the portfolio as of FY11 (VF) SBL to affluent small businessmen. VF to vendors of large auto manufacturer 4% of the portfolio as of FY11 Launched retail loans to HNI customers in FY11. 8% of the portfolio as of FY11 Launched in FY11. Assets backed funding to Small, Mid & strategic contractors.

Affluent and HNIs

Small Business Loan (SBL) & secured vendor financing (VF)

Maturity :12 - 36 months (SBL) Maturity : 1 - 24 months (VF) Repayment : EMI (SBL & VF)

Affluent and HNIs

Loan against securities

Maturity : 10 12 months Repayment : Bullet

HNIs

Commercial

Construction Equipment Finance

Maturity : 12-42 months Repayment : EMI

HNIs and Affluent

Infrastructure financing

Maturity : NA Repayment : Moratorium period followed by EMI

Launched in FY12.

Medium / large infrastructure companies

What differentiates Bajaj Finance

Strong promoters Affluent & HNI customer focused business model

Promoted by erstwhile Bajaj Auto Ltd. Post the de-merger of Bajaj Auto, the shareholding in the Company was vested with Bajaj Finserv Debt free balance sheets of the promoter, Bajaj Finserv and of the primary holding company, Bajaj Holdings & Investments Limited 56.07% holding with promoter and promoter group. 8 product line company focused on homogenous segments Profitable mix of consumer & SME business Balanced mix of secured and unsecured assets Focus on acquiring & servicing affluent & HNI clients (with the exception of captive 2Wheeler financing business) Integral to risk management strategy Large wallet size allows deep cross sell framework

Diversified lending business model

Strong Distribution Reach

More than 225 points of presence across India More than 4,000 distribution partners and dealers

High technology orientation and robust risk management

100% dealer Point of Sale terminalisation and E2E enterprise data warehouse for risk management and data mining capabilities Distinct business, underwriting & risk management structure for robust risk management.

Stable & deep management structure.

Top 100 management team members from leading MNCs. SBU business structure allows scalability. Top management vintage of 3 years.

Table of contents

Bajaj Finance Overview

Key Competitive Strengths

Strategic Overview

Financial information

Industry Overview

Annexure Portfolio Performance

Diversified lending business model

Consumer finance
2011-12 2010-11 2009-10 2008-09 200708 100% POS link up. 3 Min-TAT Started PL cross sell to existing good customers Launched POS ins. cross sell. Launched project 3sec-TAT. Launched post sale insurance cross sell.

Small business
2011-12 2010-11 Launch EMI card 3 second TAT Launch cobrand credit card. 2009-10 2008-09 Launched no insurance no loan. Launched cutting edge underwriting platform. Expanded to 23 cities. Portfolio seasoning for PSBL & Mort. Launched CE & HL. Launched partnership model Launch SBS cross sell to cross collateralize portfolios and deepen wallet size.

Historical business model. 3 day TAT. No cross sell.

Consumer Durables & 2-wheelers

Launched PSBL & Mortgages in 16 cities. Unique sales & collect model.

Personal Loans Cross-sell

Insurance services

EMI card

Credit Card Partnership

Acquisition

Cross-sell

Acquisition

Cross sell

Rel. model S,C & C

Competitive Advantage Data Mart and Cross sell capabilities Customer Lifecycle Management Low ticket - high volume transaction domain specialization

Competitive Advantage Relationship model Sales & Collect Premium customer experience model Cross sell to Small Business segment

10

Strong Distribution Reach

Geographic presence
Business Line Sales Finance 2W - Hubs 2W - Spokes Small Businesses FY08 116 116 300 0 FY09 87 55 200 15 FY10 79 54 150 15 FY11 79 54 150 23

Distribution
Business Line
Sales Finance Dealer 2W Dealer/ASCs Small Businesses Partner Small Businesses Support

FY08 19,000+ 1,400+ -

FY09 4,500+ 1,400+ 175+ 175+

FY10 2,000+ 1,275+ 225+ 225+

FY11 2,500+ 1,400+ 250+ 275+

# of New Loans Disbursed (000s)

Business Line FY08 621 397 0 1,018 FY09 352 219 3.5 574 FY10 515 378 5 897 FY11 1,038 522 9 15,60

Map not to scale

Sales Finance 2W Small Businesses Total

Assets under management (` billion) `

FY08 AUM 24.78 FY09 25.39 FY10 40.32 FY11 75.71

Deep distribution, sizeable acquisition engine and growing balance sheet

11

High technology orientation and robust risk management An illustration

Cross Sell offers to customers @ 4 Month

14

2
- Call - Fax - Data SSP Data Entry

3 minutes Turnaround Time (TAT)

13
Customer gets Username & Password for online access

a
1
Credit bureau

b
De-dupe Engine

c
Application Score

12
RTGS to dealer Account (<24 Hrs)

Dealer

Data moves to Datamart and B2B / B2C

11
Processing Shop 5min

Disbursal

3 10
Central / national operation centre

Fraud early warning score card

4
Customer TVR

Re-verification of application details by call centre

15 minutes TAT

Courier

1 day

8 5
Product Delivered at Home By Dealer for address Verification 3 -4 days

Confirmation & Verification SMS / Email to Customer

Files at Files at Branch Branch Inward Inward

Provide KYC Documents 12

Stable & deep management structure

Rajeev Jain
Chief Executive Officer

Rajeev brings with him more than 18 years of experience in the consumer & Small Business Segment lending industry. He has been with the Company for 4 years and has worked towards steering the organization onto a path of fast-paced growth and defined an ambitious trajectory of building a diversified lending institution. He has earlier worked with AIG, GE money and American Express. A Management graduate with 15 years of varied experience across Strategic Planning, Sales & Marketing, Product Design & Development, to Six Sigma, Collections, and Analytics. He has worked for GE & Citi. Amit manages the high growth Mortgages business for Bajaj Finserv lending.

Deepak Gupta
Chief Human Resources

Deepak has an experience of 20 years in Financial Services, ITES, and Manufacturing industry. Deepak is responsible for driving people strategy for the organization and making Bajaj Finserv Lending the Employer of Choice. He earlier worked with Reliance, CRISIL and SREI.

Amit Gainda
Business Head Mortgages

Deepak Reddy
Business Head Personal & Small Business Loans

Deepak has over 20 years of experience in distributing Financial Services & Consumer Durables. He joined us from American Express, where he held various positions in their Personal Loans & Consumer Card businesses for over 9 years. Deepak manages our unsecured business & personal loans.

Ashish has 13 years of rich and varied work experience across manufacturing, FMCG and Retail Banking in large multi-national organizations across credit cards, secured and unsecured assets as well as liabilities. He join the Company from Barclays & would be responsible for launching credit card business.

A chartered accountant by profession, Devang brings with him 15 years of experience in consulting and financial services. Joining us from AIG, where he worked as Vice President Business Development & CRM for the consumer finance business. Earlier he worked with GE money for 8 years.

Ashish Panchal
Business Head Credit Cards

Devang Mody
Business Head Sales Finance

13

Stable & deep management structure (contd)

Diwakar Pundir
Chief Credit Officer

Diwakar has nearly 12 years of varied and rich work experience, with the last ten years in Risk Management. He joins us from Citigroup, where his last assignment was managing risk and credit for West & South India regions for the Small & Medium Enterprises (SME) business. He would be managing the commercial credit.

Rakesh Bhatt
Chief Information Officer

Rakesh has an overall experience of 18 years in finance & technology industry. He has played several leadership roles encompassing CIO responsibilities, IT Product Mgmt., and Delivery. Currently, as the chief architect of our technology initiatives, he has successfully harnessed technology to introduce many innovations Has earlier worked with GE money, Reliance and AIG. Sanjeev is a chartered accountant by profession 19 years of experience in Retail Consumer Finance, SME mid-markets, and Corporate Finance for sectors such as Infrastructure, Industrial, Healthcare, Transportation, Auto, and Securitization of Receivables Sanjeev manages construction equipment business in strategic & retail space He earlier worked with RBS and Citi.

Pankaj Thadani
Chief Financial Officer

Pankaj joined Bajaj Finserv Lending in 2006, bringing with him a rich experience of 28 years in financing, financial accounting, cost accounting, tax, and systems He is a Mathematics Graduate and a Chartered Accountant Pankaj has provided invaluable advice and direction that has helped the Company grow from a single business company to a diversified NBFC. Rajesh is a management graduate with over 14 years of experience in financial services across consumer and commercial lending. Rajesh joins us from HSBC where he was handling the portfolio risk management unit for HSBCs consumer credit risk function. Rajesh is responsible for maintaining portfolio quality. He earlier worked with GE money and Standard Chartered.

Sanjeev Vij
Business Head Construction Equipment Finance

Rajesh K
Chief Risk Officer

Vivek Likhite
Corporate Audit Services

Vivek joined Bajaj Finserv Lending in 2007. He is a Chartered Financial Analyst and holds a Cost Accountant degree from ICWAI. He has an experience of 22 years in strategic planning, process and operations management, accounts, funds management, budgeting, and MIS He worked across operations, LAS business & is currently responsible for setting up corporate audit services.

14

Table of contents

Bajaj Finance Overview

Key Competitive Strengths

Strategic Overview

Financial information

Industry Overview

Annexure Portfolio Performance

15

Product line strategy

Profit Maximisers
Relatively higher RoA Lower asset base and lower capital requirements High risk and return

Scale Builders
Relatively lower RoA Higher asset base and higher capital requirements Lower risk & return

Non qualifiers
Low ROE Lack of competitive advantage Customer segmentation

Consumer

Relatively higher RoA Not a banks business Large cross sell opportunity Credit Card partnership (WIP) Relatively high RoA Critical to full scale SF business

Relatively low RoA Captive financing E2E Integration play leading to higher ROA

2 Wheeler Finance

Sales Finance

Car loans Captive play

Gold loans & Micro finance Customer segmentation issues Relatively low RoA Un-penetrated space Meet working capital needs of MSME & SME clients
Mortgage

Small Business Loans

Small business

Relatively higher RoA Meet working capital needs of MSME & SME clients Relatively higher RoA Regulatory advantage. Meet working capital needs of MSME & SME clients

Commercial vehicle Specialized business

Loan Against Securities

Construction Equipment Infra ancillary

Commercial

Relatively low RoA Dominated by non banks. Large upstream opp. Relatively low RoA High growth rates and high demand potential
16

Table of contents

Bajaj Finance Overview

Key Competitive Strengths

Strategic Overview

Financial information

Industry Overview

Annexure Portfolio Performance

17

Summary financial statement

` in billion Financials snapshot Deployments Assets under finance Assets under management (AUM) Income from operations Interest expenses Net Interest Income (NII) Operating Expenses Loan Losses & Provision Profit before tax Income tax Profit after tax Ratios Total Opex to NII Loan loss to Assets under finance Return on Average Asset under finance Earning per share (Rs.) Return on Average Equity FY08 30.36 24.78 24.78 5.03 1.70 3.32 1.93 1.09 0.30 0.09 0.21 FY08 58.1% 4.4% 0.9% 5.68 2.0% FY09 24.51 25.39 25.39 5.99 1.64 4.35 2.20 1.64 0.51 0.17 0.34 FY09 50.7% 6.4% 1.3% 9.27 3.2% FY10 45.85 40.32 40.32 9.16 2.02 7.15 3.20 2.61 1.34 0.45 0.89 FY10 44.7% 6.5% 2.8% 24.43 8.0% FY11 94.35 72.70 75.71 14.06 3.78 10.28 4.54 2.05 3.70 1.23 2.47 FY11 44.1% 2.8% 4.3% 67.47 19.7%
18

CAGR 46% 43% 45% 41% 30% 46% 33% 23% 131% 136% 129%

Financial performance trends FY-11

# of Loans Disbursed (000)

40%
1,018 594 621 355 397 FY-08 239 FY-09 2 Wheelers 442 FY-10 Others Total 1,123 1,048 681 522 FY-11 1,570

Disbursements (` billion)
106%
45.85 30.36 15.52 14.84 FY-08 24.51 32.21 16.68 7.83 FY-09 2 Wheelers 13.64 FY-10 Others Total 20.34 FY-11 94.35

74.01

AUM (` billion)
88%
40.32 24.78 8.31 16.47 FY-08 25.39 13.64 11.75 FY-09 2 Wheelers 26.39 13.93 FY-10 Others Total 19.53 FY-11
FY-08

Revenue (` billion)
75.71 56.18
5.03 5.99

53%
9.16

14.06

FY-09

FY-10

FY-11

19

Financial performance trends FY-11 (contd)

NII (` billion)
44%
7.15 4.35 3.32 10.28
58%

Operating Expenses % of NII

51% 45% 44%

FY-08

FY-09

FY-10

FY-11

FY-08

FY-09

FY-10

FY-11

Loss provision (` billion)

2.68 1.64 1.09
27%

Net NPA & Provisioning coverage

21%
2.05
7.0% 5.5% 55% 32% 2.2% 0.8% 79%

FY-08

FY-09 Net NPA

FY-10 coverage

FY-11

FY-08

FY-09

FY-10

FY-11

20

Financial performance trends FY-11 (contd)

Pre-tax profit (` billion)

176%
3.70

Return on Assets & Return on Equity

19.7%

1.34 0.30 0.51

0.9% 2.0%

1.3% 3.2%

8.0% 2.8%

4.3%

FY-08
FY-08 FY-09 FY-10 FY-11

FY-09 ROA

FY-10 ROE

FY-11

Capital adequacy
40.7% 38.4% 25.9% 20.0% 40.7% 38.4% 25.9% 3.2% 16.8%
5.68

Earnings per share (` )

176%
67.47

24.43 9.27

FY-08

FY-09 Tier-I Tier-II

FY-10 Total CAR

FY-11
FY-08 FY-09 FY-10 FY-11

21

Financial performance trends Q4-FY11

# of Loans Disbursed ( 000)

391 261 266 143 118 Q4'10 125 Q1'11 2 Wheelers 317 345 194 123 Q2'11 Others 146 Q3'11 Total 242 8.92 128 Q4'11 4.34 Q4'10 491

Disbursements (` billion)
42% YoY 370
13.26 15.77 4.69 Q1'11 2 Wheelers 16.56 4.72 Q2'11 Others 5.79 Q3'11 Total 27.74 20.46 21.28 21.95 19.73 5.14 Q4'11

88% YoY 24.87

AUM (` billion)
68.68 40.32 26.39 13.93 Q4'10 49.38 34.25 15.13 Q1'11
2 Wheelers

Revenue (` billion)
88% YoY 75.71
2.97 3.26 2.57 3.88

54% YoY 3.95

57.73 50.27 18.41 Q3'11

Total

56.18

41.26 16.47 Q2'11

Others

19.53 Q4'11

Q4'10

Q1'11

Q2'11

Q3'11

Q4'11

22

Financial performance trends Q4-FY11 (contd)

NII (` billion)
39% YoY
2.85 1.98 2.24 2.43 2.76 37%

Operating Expenses % of NII

41% 43% 44% 48%

Q4'10

Q1'11

Q2'11

Q3'11

Q4'11

Q4'10

Q1'11

Q2'11

Q3'11

Q4'11

Loss provision (` billion)

0.89 0.61 0.62 0.45 0.38
55%

Net NPA & provisioning coverage

58% YoY
2.2% 1.8% 75% 1.4% 63% 77% 1.1% 0.8% 79%

Q4'10

Q1'11

Q2'11 Net NPA

Q3'11 coverage

Q4'11

Q4'10

Q1'11

Q2'11

Q3'11

Q4'11

23

Financial performance trends Q4-FY11 (contd)

Pre-tax profit (` billion)

200% YoY
1.15 0.71 0.35 Q4'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 0.78 1.06 25.9% 25.9%

Capital adequacy
24.3% 2.3% 22.7% 3.2% 21.2% 3.3% 20.0% 3.20% 16.8%

22.0%

19.5%

17.9%

Q1'11 Tier-I

Q2'11 Tier-II

Q3'11 Total CAR

Q4'11

Earnings per share (` )

182% YoY
20.87 14.42 19.40

Promoters Shareholding
55.2% 55.5% 56.1%

12.78 6.88

50.5%

50.5%

Q4'10

Q1'11

Q2'11

Q3'11

Q4'11

Q4'10

Q1'11

Q2'11

Q3'11

Q4'11

24

Table of contents

Bajaj Finance Overview

Key Competitive Strengths

Strategic Overview

Financial information

Industry Overview

Annexure Portfolio Performance

25

Strong growth momentum with under-penetration

Nominal GDP Movement (` Trillion)

CAGR 12.6%
37.8 45.4 37.8

Loan Against Property in India (` Billion)

Disbursement
FY 1014P CAGR : 28%
19%

FY05-11 CAGR 17% 58.7 73.1 52.3 61.3 45.4 52.8

Market Share
5% 33%

28.8 28.8

32.8 32.8

325
43%

85

120
Housing Finance Co. Pvt. & For eign Banks NBFCs PSU Banks

FY-05 FY-05

FY-06 FY-06

FY-07 FY-08 FY-08 FY-07 FY-09

FY-09 FY-10

FY-10 FY-11

FY-09E

FY-10E

FY-14P

Source: Central Statistical Organisation (CSO)

Source: CRISIL Research (Loan Against Property , December 2010)

Housing loans outstanding and % of GDP (` Billion, %)

FY 11-15P CAGR : 17%

Two wheeler finance disbursements and finance penetration (` Billion, %)

12,363
800 600 400 200 0 295 72 380 84 37% 33%
FY 11-15P CAGR : 11%

9.1% 4,765 9.0% FY09 FY10 Housing Loans 5,588

30% 478

33% 657 150

9.1% 6,640

99

FY11-P

FY15-P

FY- 09E New 2W Sales

FY- 10E

FY- 11P

FY- 15P Finance Penetration

Housing loans as % of GDP

New 2W Finance

Source: CRISIL Research (Update Retail Finance Housing, Feb. 2011) and CSO

Source: CRISIL Research (Update Retail Finance Auto, May 2011)

26

Table of contents

Bajaj Finance Overview

Key Competitive Strengths

Strategic Overview

Financial information

Industry Overview

Annexure Portfolio Performance

27

Credit Quality of Bajaj Finance customers across products

Consumer Durable Loans 90+ DPD

0.40% 0.23% 0.84% Auto Loans 1.30% 0.28% 0.41% 0.15% Consumer Durables Loans NBFCs Banks 0.31% 0.58% Credit Cards 0.83% Home Loans 0.49% 0.54% 0.69% Personal Loans 1.60%

Personal Loans 90+ DPD

4.00%

1.00%

Business Loans

Bajaj Finance Bajaj Finance

Banks

NBFC

Small Business Loans 90+ DPD

1.87%

Mortgage and Loan Against Property 90+ DPD

0.93% 0.75%

0.71% 0.42% 0.08%

Bajaj Finance

Banks

NBFC

Bajaj Finance

Banks

NBFC

Source: Data from CIBIL -TransUnion Database Note: Conclusions drawn are Companys inference

28