Bajaj Finance vs Shriram Finance (2026): AUM, NPAs, ROA, Funding & Which Is Better?

Bajaj Finance vs Shriram Finance: the lender scoreboard

Bajaj Finance has become a distribution company that happens to sell credit

The sheer size of its customer base changes the unit economics.

Bajaj Finance had approximately 124.4 million customers at June 2026.

It booked more than 16 million new loans during Q1 FY2027.

This scale allows it to repeatedly lend to existing customers rather than acquiring every borrower from scratch.

A consumer may enter the ecosystem through appliance financing, then later use a personal loan, business loan, gold loan or other product.

That cross-sell loop is difficult for smaller NBFCs to reproduce.

Shriram's moat is almost the opposite

Shriram Finance built expertise where borrower cash flows are messy and collateral knowledge matters more.

Commercial vehicle finance remains its largest asset category.

Q1 FY2027 commercial vehicle AUM was approximately ₹1.47 lakh crore.

Passenger vehicle AUM was roughly ₹68,650 crore.

The company also lends against gold, to MSMEs, small businesses and retail customers.

Its network extends across more than 3,200 branches, giving it reach into geographies and borrower groups that cannot always be underwritten using only a digital credit score.

This physical underwriting network is not fashionable, but it is a real moat.

Bajaj is currently growing the balance sheet faster

Bajaj Finance's AUM increased almost 24% year on year, compared with approximately 15.3% for Shriram Finance.

The difference is meaningful because Bajaj is already the larger institution.

Growing a ₹5.47 lakh crore loan book at close to 24% adds far more incremental assets than growing a ₹3.14 lakh crore book at 15%.

The risk is that very fast lending growth can eventually reduce underwriting discipline.

So far, Bajaj's NPA ratios suggest that growth has not translated into headline deterioration.

Shriram's 60% profit growth needs a different interpretation

Shriram Finance reported Q1 FY2027 standalone PAT of approximately ₹3,445 crore, up nearly 60% year on year.

NII increased roughly 34% to ₹8,056 crore.

The improvement came from a combination of loan growth, stronger spreads, funding changes and operating leverage.

This growth rate is far above AUM growth, which tells investors that the quarter was driven by more than simple balance-sheet expansion.

It also means extrapolating 60% profit growth indefinitely would be unreasonable.

Asset quality remains Bajaj Finance's strongest argument

Sub-1% gross NPA is a powerful number for a lender growing above 20%.

Bajaj Finance improved GNPA from 1.03% a year earlier to 0.96%.

NNPA improved from 0.50% to 0.39%.

Loan-loss and provision intensity also improved on an underlying basis despite the company creating additional prudent macro provisions.

That indicates management is not simply maximising current profit by reducing buffers.

Shriram's higher NPAs are part business mix, part real risk

It would be wrong to dismiss Shriram's 4.64% GNPA entirely because of its borrower profile.

Used commercial vehicles and smaller operators can produce higher delinquencies than prime salaried consumer borrowers.

Collateral recovery can also take longer.

But higher NPAs still consume management attention, collection expense and provisioning capacity.

Shriram's NNPA improved year on year to approximately 2.33%, which is encouraging.

Investors nevertheless need to demand a valuation discount for the higher credit-risk profile.

ROA shows why Bajaj Finance gets the premium

Bajaj Finance reported annualised Q1 ROA of approximately 4.7%.

Shriram Finance's Q1 ROA was around 3.9% in current reporting.

Both are strong for large lenders.

The difference becomes meaningful when compounded across hundreds of thousands of crores of assets.

Bajaj earns more profit from each rupee of deployed assets while simultaneously carrying lower NPAs.

That combination is exactly the type of lending quality the market tends to reward with a higher P/B ratio.

But Shriram's new capital buffer may create the next growth cycle

A 34% capital adequacy ratio is not economically efficient if it remains idle forever.

It becomes valuable if Shriram can deploy that capital into loans yielding attractive risk-adjusted returns.

The company also benefits from its strategic partnership with MUFG and improved access to institutional capital.

If funding costs decline and the equity is deployed without worsening credit quality, current book value could compound faster.

If deployment is slow, the capital raise can depress ROE for longer than shareholders expect.

Funding models are another major difference

Bajaj Finance has a substantial retail deposit franchise; Shriram Finance has an even more deposit-heavy funding mix relative to borrowings.

Bajaj Finance's deposit book was approximately ₹68,500 crore at June 2026.

Shriram Finance reported public deposits representing roughly 31% of its borrowing profile after the latest capital and liability changes.

Shriram also uses bank loans, NCDs, securitisation, ECBs and other borrowing routes.

Funding diversity matters because NBFC crises often begin with liability-market stress rather than immediate credit losses.

Liquidity is unusually strong at Shriram after the capital raise

Shriram Finance's liquidity coverage ratio was reported above 260% at June 2026.

The large equity infusion also reduced near-term balance-sheet pressure.

Bajaj Finance maintains strong liquidity and high-quality funding access as one of India's largest AAA-rated NBFC franchises.

Neither company currently looks funding constrained.

The competitive question is therefore cost of funding rather than basic access to money.

Why free cash flow is deliberately absent from this verdict

Bull Run's generic free-cash-flow fields are negative for both companies, which is normal for rapidly expanding lenders.

An NBFC raises money and turns that money into loans.

Loan growth consumes cash in a conventional cash-flow statement.

A manufacturing-style FCF screen would therefore penalise precisely the lenders growing their books fastest.

For this sector, AUM growth, ROA, credit costs, NPAs, capital adequacy and liquidity are more useful.

Valuation: Shriram Finance is significantly cheaper

Shriram Finance trades at approximately 21.5x trailing earnings versus Bajaj Finance at roughly 31.3x.

The P/B gap is also meaningful: about 3.69x for Shriram compared with 5.58x for Bajaj.

Bajaj's premium reflects cleaner asset quality, higher ROA, larger scale and a much larger consumer ecosystem.

Shriram's discount reflects higher NPAs, a different borrower profile and historically higher perceived credit risk.

The valuation debate is whether the MUFG capital infusion and improved funding profile deserve a smaller discount than the market previously applied.

The share prices tell very different stories

Shriram Finance's one-year return is extraordinary.

The stock is also close to its 52-week high and has an RSI near 70.

That means the market has already recognised a meaningful part of the capital and earnings improvement.

Bajaj Finance's recent performance is positive but far less dramatic.

Two lending models, two very different strengths

Bajaj Finance vs Shriram Finance FAQs

Which company is bigger?

Bajaj Finance, with AUM of approximately ₹5.47 lakh crore versus Shriram Finance at about ₹3.14 lakh crore.

Which has lower NPAs?

Bajaj Finance by a large margin. Its Q1 FY2027 GNPA was 0.96% compared with Shriram Finance at approximately 4.64%.

Which stock is cheaper?

Shriram Finance on both trailing P/E and price-to-book.

Which grew profit faster in Q1 FY2027?

Shriram Finance, with standalone PAT growth of roughly 60% versus Bajaj Finance attributable consolidated PAT growth of about 27%.

Which has higher ROA?

Bajaj Finance currently reports the higher asset-level profitability, around 4.7% annualised versus Shriram Finance around 3.9%.

What does MUFG's investment mean for Shriram Finance?

It materially increased Shriram's equity capital, capital adequacy and medium-term capacity to grow the loan book, while temporarily changing ROE because the equity base became much larger.

Why is Bajaj Finance more expensive?

The market assigns value to its lower NPAs, higher ROA, massive consumer ecosystem, funding access and long history of rapid lending growth.

Research sources

• Bull Run current market, ownership and valuation data
• Bull Run Smart Screeners
• Bajaj Finance financial results
• Bajaj Finance investor relations
• Shriram Finance official financial results
• Shriram Finance business, AUM and branch-network information