Dalal Street has a new rivalry to watch. On one side is HDB Financial, fresh from one of the biggest IPOs of the year. On the other is Bajaj Finance, the seasoned NBFC giant that has ruled the market for years.
India’s financial sector is huge from banks to NBFCs, insurance to fintech and the competition, as a result, is also fierce. But the big question now is – can this new entrant ride its IPO buzz to take on the top spot, or will Bajaj Finance remind everyone why it is still at the top?
HDB Financial Vs Bajaj Finance: Can the newcomer dethrone the market giant?
On Dalal Street, the stage is set for a classic battle between a fresh face and an industry heavyweight.
HDB Financial Services, created in 2007, has quickly built a strong presence across India. With 1,700 branches spread across different states and union territories, it serves more than 19 million customers and offers everything from asset finance and mortgage loans to consumer durable financing, gold loans, and even BPO services.
The company as of now has a market capitalisation of over Rs 63,000 crore.
But standing firmly on the other side is Bajaj Finance, a name almost synonymous with NBFC leadership in India. With a customer base of over 100 million, a network of 4,263 branches, and a lending portfolio that stretches from retail to SME, rural, and commercial segments, Bajaj Finance is a big player in the industry. It also offers home loans and brokerage services through its subsidiaries, Bajaj Housing Finance and Bajaj Financial Securities.
The company has a market capitalisation of Rs 5.33 lakh crore.
The question now is that can HDB’s rapid rise and range of offerings chip away at Bajaj Finance’s dominance, or will the king of NBFCs continue to reign unchallenged?
HDB Financial Vs Bajaj Finance: Financial performance
HDB Financial Services, which debuted on Dalal Street in July with a 13% listing premium over its IPO price of Rs 740, has quickly become one of the top eight most valuable NBFCs in India. The Rs 12,500 crore IPO saw strong demand, being subscribed 16.69 times.
However, the Q1FY26 numbers showed a softer side. The company posted a net profit of Rs 568 crore, slipping over 2% compared to the Rs 582 crore it earned in the same quarter last year. Its net profit margin narrowed to 12.72% from 14.98% a year ago.
In contrast, Bajaj Finance, the heavyweight of the NBFC space, delivered another quarter of strong growth. For Q1FY26, the company’s net profit surged 30.5% YoY to Rs 2,789 crore. On a sequential basis, profits climbed 15%.
HDB Financial Vs Bajaj Finance: Net Interest Margins (NIM)
HDB Financial Services reported a NIM of 7.7% in Q1FY26, an improvement from 7.6% in Q4 FY25.
Bajaj Finance, on the other hand, reported a standalone NIM of 5.29% in Q1FY26. Its annualised Return on Average AUF (Assets Under Finance) also stood at 5.29% for the quarter, as per the company’s investor presentation.
HDB Financial Vs Bajaj Finance: NPAs, asset quality and slippages in Q1 FY26
For HDB Financial, gross stage 3 loans (equivalent to gross NPAs) increased to 2.56% of total advances in Q1FY26, compared to 1.93% a year ago and 2.26% in Q4FY25. Net stage 3 loans (net NPAs) rose to 1.11% from 0.77% in Q1FY25. The provision coverage ratio (PCR) on stage 3 loans fell to 56.70% from 60.24% a year earlier. Credit cost increased to 2.5% of total gross loans versus 1.8% in Q1FY25. Slippages were most notable in the Commercial Vehicle (CV) and Unsecured Loan (USL) segments.
Bajaj Finance also saw stress during the quarter. Gross NPAs rose to 1.03% in Q1FY26 from 0.86% in the previous year, while net NPAs moved up to 0.50% from 0.38%. Loan loss provisions increased 26% YoY, with credit cost at 2% of AUM. Slippages were sharpest in the MSME segment (around 12% of the loan book), as well as Auto Finance and Rural Unsecured segments. SME delinquency rose 28 bps QoQ, while Auto Finance NPAs spiked 135 bps, indicating rising stress. Its subsidiary, Bajaj Housing Finance, however, maintained low gross NPAs of just 0.30%.
HDB Financial Vs Bajaj Finance: Loan growth
HDB Financial posted a 14.3% YoY growth in its gross loan book, which stood at Rs 1.09 lakh crore. Furthermore, enterprise lending accounted for 38.7% of the portfolio, asset finance 37.8%, and consumer finance 23.5%. However, disbursements dipped 8.09% YoY to Rs 15,171 crore.
Bajaj Finance, on the other side, booked 13.49 million new loans during the quarter which is up 23% YoY. Its customer base also expanded to 106.51 million. In a similar note, its assets under management increased 25% YoY to Rs 4.41 lakh crore. The company also maintained a healthy capital adequacy ratio of 21.96%. Furthermore, the company’s subsidiaries contributed to growth, with Bajaj Housing Finance’s loan book rising 24% YoY to Rs 1.20 lakh crore. Similarly, Bajaj Financial Securities reported a 37% jump in profit alongside a 39% increase in assets under finance.
HDB Financial Vs Bajaj Finance: Who is winning the stock market race?
Will HDB Financial prove to be a long-term challenger to Bajaj Finance’s dominance, or is this battle already tilting in favour of the veteran? Let’s take a look at the share performance of both the companies.
HDB Financial Services made its secondary market debut on July 2, with plenty of buzz. Listing at Rs 835 per share, a 12.84% jump from its IPO price of Rs 740, the Rs 12,500 crore issue seemed off to a flying start. Within a month, the stock has slipped nearly 10%, and since listing, it is down about 9%. Even in the last week, the gain was just about 1%.
On the other side is Bajaj Finance, the NBFC giant with years of market muscle. Over the past five days, its shares fell 3%, and in the past month, they are down 6%. Yet, zoom out and the picture changes – a modest 2% gain in the past six months, a 33% jump over the year, and a 157% rally in the last five years. Its stock has swung between a 52-week high of Rs 978.80 and a low of Rs 642.50.