Take one of them for discussion purpose. Bajaj Finance is now trading where is was just one and half or two years ago. So all the steep fall had come because of the steep rise as well. In 2014, Bajaj Finance was quoting below 150. So you can see how steep the rise was. They simply lent where regular bankers did not bother to go. But it would be a fallacy to think that they will not have bad debt problems. Most of their lending is in consumer finance segment. Since that segment in India was rapidly expanding in the last decade, defaults were insignificant as compared to new business expansion. But Covid kind of situation can turn the economy around and make lenders face the reality.
2008 US crash was related to consumer lending. (both credit cards as well as home mortgages). That market is more matured in this segment and hence they have seen the cycles. In our country we are yet to see that. When General Electric was investing in Asia finance business, (Thailand, Indonesia, and also SBI Cards investment in India etc), their boss Jack Welsh said, " In Asia, borrowers feel that it is an insult to default and to be seen with collection agents coming to their homes" GE exited SBI cards longtime ago and they smartly exited finance business in Asia. Now these markets are not so nascent and once personal bankruptcy code is in place in India, you can see the defaults. That may impact HDFC, LIC Housing Finance and SBI Cards as well.
I think, in the long run, it is a very risky business. Especially, the consumer lending business of Bajaj Finance.
Bajaj Finserve also owns Insurance companies. They are now writing down some of their risky investments (read bonds). That is another headache.