Bajaj Finance Share Price Crashes 90% Today; Here's Why

Bajaj Finance Ltd (BAF) shares connected Monday turned ex-split successful nan ratio of 1:2 and ex-bonus successful nan ratio of 4:1. Adjusted for nan prize rumor and banal split, nan BAF banal was trading 2.26 per cent higher astatine Rs 954.50 on BSE astatine open. 

To beryllium sure, Bajaj Finance shares were down 89.99 per cent complete Friday's unadjusted closing value of Rs 9,334.15 apiece connected BSE. It is imaginable that trading apps of definite brokerages mightiness beryllium showing this unadjusted Bajaj Finance stock value (adjusted price: Rs 933.40) for Friday and, thus, suggesting a 90 per cent-odd autumn connected nan counter.

Since June 16 was group arsenic nan grounds day for nan 2 firm actions, Bajaj Finance would find eligible shareholders coming only. 

In a banal split, already owned shares are divided into shares pinch smaller look values successful a bid to summation liquidity connected nan counter. A prize rumor besides increases nan number of outstanding equity shares, but has nary effect connected look worth -- they are issued from free reserves and surplus of nan company. 

A banal divided of 1:2 intends each already owned stock is divided into 2 caller shares of caller look worth (FV) of 1/2 of original FV. In Bajaj Finance's case, nan prevailing look worth is Rs 2. So 1 stock of Bajaj Finance of look worth Rs 2 (Friday's closing price: 9,340) sewage turned into 2 Bajaj Finance shares pinch look worth of Re 1. The Bajaj Finance banal value sewage adjusted accordingly. 

Following nan subdivision of equity shares, prize issues successful 4:1 ratio came into effect. A prize rumor of 4:1 intends if an investor already owns 1 share, s/he gets 4 further caller shares. Now since 1 Bajaj Finance banal turned into 2 stocks of look worth 1 pursuing nan banal split, nan prize rumor resulted successful 8 further shares. 

Bajaj Finance is simply a NBFC pinch a wide merchandise portfolio comprising of loans for two-wheelers, user durables, housing, and mini businesses among others. 

In a statement connected June 6, Axis Securities said nan NBFC has moderated pricing successful definite unsecured products which impacted yields. NIMs contraction successful FY25, thus, was sharper than anticipated. 

In nan existent complaint trim cycle, BAF expects costs of money (CoF) to gradually diminution by 10-15bps complete FY26 (assuming 3three complaint cuts) and settee astatine 7.75-7.85 per cent successful FY26.

This diminution factors successful nan lag successful nan downward repricing of agelong tenor loans and 75 per cent of borrowings, which are fixed-rate. 

"BAF remains well-placed to navigate nan complaint trim rhythm contempt nan pricing unit successful definite products and protect NIMs pinch a scope to amended margins complete nan mean term," Axis Securities said. 

The brokerage said Rajeev Jain's continuation pinch BAF successful nan capacity of Vice Chairman addresses activity continuity issues and ensures nan seamless execution of nan strategy. 

"We expect BAF to present a beardown AUM/Earnings maturation of 25/26/25% CAGR complete nan mean term, driven by steady-to-marginally improving NIMs, operating leverage driving costs ratio improvement, and affirmative outlook connected plus quality, keeping in installments costs nether control," Axis Securities said. 

It expects BAF to present a RoA and RoE of 4.5-4.6 per cent and 19-21 per cent, respectively, broadly in-line pinch nan management's semipermanent guidance.