Bharti Airtel and its promoter group will inject ₹20,000 crore into Airtel Money, its newly-licensed non-bank arm, a move that puts the telecom operator in direct competition with Mukesh Ambani’s Jio Financial Services.
Airtel Money, a company incorporated in July, received a non-banking financial company (NBFC) licence earlier this month, Bharti Airtel informed the stock exchanges on 17 February. The non-bank lender will not be able to accept deposits, as per the Reserve Bank of India’s (RBI) licensing terms.
In a statement issued on Monday, Bharti Airtel said it will contribute 70% of the capital, while the promoter group will bring in the remaining 30% through Bharti Enterprises Ltd.
Given the minimum capital adequacy requirement of 15%, the NBFC can leverage about five times its capital. This would allow Airtel Money to build a loan book of ₹1 trillion with the current capital injection, analysts said.
A comparison with Reliance Industries’ financial services business is unavoidable. For instance, Jio Financial Services has a wide array of businesses, including a payments bank Jio Payments Bank and non-bank financier Jio Credit. Airtel, on the other hand, now has Airtel Payments Bank, and Airtel Money.
A senior consultant said that Airtel is following the same model as Reliance and getting an NBFC licence shows its push to enter the lending market, something that it had so far been left out of. Payments banks were conceptualised as a separate category in 2015 to reach the under-banked and unbanked masses, accepting deposits of up to ₹2 lakh per customer. But they cannot lend.
Amid tighter licensing
With the RBI sticking to its stance against allowing corporates into banking, many groups have instead turned to NBFC licences over the years. Large business houses such as Larsen & Toubro and Godrej Group also operate non-banking financial arms.
“The motivation for Airtel to move to an NBFC set-up could be a large upside in revenue from lending products such as working capital loans, credit cards, personal loans etc. A payment bank has constraints over such offerings,” said Abhay Johorey, managing director, Protiviti Member Firm for India, a consultancy.
According to Johorey, Airtel would need strong underwriting abilities with targeted lending and sound collection processes to succeed in the NBFC space.
He said that the ₹20,000-crore capital pool provides a solid base for a well-known brand like Bharti Airtel, allowing it to begin with small-ticket personal loans, refine its business model, and gradually build a diversified portfolio as it achieves key milestones.
Committed to inclusion
Meanwhile, Airtel said that its expansion in India’s fast-growing financial services sector underscores its commitment to deepening financial inclusion and empowering the underserved consumers.
Over the past two years, Bharti Airtel has built a strong credit engine and operated under a lending service provider (LSP) model, facilitating loans for partners without lending from its own books.
The lending service provider platform has already achieved adoption with over ₹9,000 crore in disbursements, Airtel said.
“We have built one of India’s most trusted and scalable digital credit engines—reaching millions with high‑quality credit supported by industry‑best performance metrics,” Gopal Vittal, executive vice-chairman of the company, said in the release. “Our NBFC expansion strengthens this foundation and reflects our ambition to build a differentiated, future‑ready digital lending business”.
As of December-end, Airtel had 466 million customers in India, including 368.5 million mobile users. In comparison, Jio had 515.3 million users in the country. Monthly average revenue per user (Arpu) for Airtel was at ₹259 compared to Jio’s ₹213.7.
In the quarter ended December, Jio Financial Services’ assets under management (AUM) under its NBFC was at ₹19,049 crore, up 4.5 times year-on-year.
“Formal credit to GDP ratio in India is at 53%, according to CareEdge Ratings, and highlights the scope for lending in the country,” Airtel said. “The expansion is also a natural adjacency that will leverage the large Airtel customer base to build the next growth engine for the company and further diversify its portfolio”.
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