Bajaj Finserv has said that its board has also approved the proposal of stock split or sub-division of equity shares in the ratio of 1:5 as well as gave its nod for the issuance of bonus shares in the ratio of 1:1. “The board has approved sub-division of each existing equity share of face value of Rs 5/- into Five equity shares of face value of Rs 1/- fully paid- up. It also approved the issue of one bonus equity shares of face value of Rs 1/- for every 1 fully paid-up equity share of Rs 1/-,” the financial services company announced in an exchange filing today.
The company will be required to amend the capital clause of the memorandum of association of the company, subject to the approval of the shareholders to be obtained by postal ballot, it said in a regulatory filing.
For Q1FY23, Bajaj Finserv’s consolidated net profit surged about 57 per cent to Rs 1,309 crore as compared to Rs 833 crore in the same quarter last year. The profit includes the unrealised MTM loss of insurance subsidiaries of Rs 283 crore as against gain of Rs 25 crore year-on-year (YoY).
Bajaj Finserv is the holding company for the various financial services businesses under the Bajaj group.
Bajaj Finserv Stock Split
A stock split increases the number of shares that are outstanding by issuing more shares to the current shareholders. Stock split decreases the market price of the individual shares, however, does not result in changing the market capitalization of the company.
A company engages in stock split decision to make its stock more affordable if its price levels are very high, which in thus would lead to increase in liquidity in the stock. Meanwhile, bonus shares are fully paid additional shares issued by a company to its existing shareholders.
The company intends to complete the necessary corporate action on or before 26 September 2022, subject to necessary approvals.
“The company and its subsidiaries have grown significantly, in terms of business and performance, over the years. Among its peers, the share price of the company is one of the highest while having one of the smallest capital bases.
Stock Price History
The surge in Bajaj Finserv of up to 10 per cent came after the board approved bonus issue in the ratio of 1:1 and stock split in the ratio of 1:5.
Bajaj Finserv shares have declined more than 15 per cent in 2022 (year-to-date) so far whereas they are up about 4 per cent in a year’s period. Bajaj Finserv is focused on lending, asset management, wealth management and insurance services.
The company was formed in 2007 as a result of its demerger from Bajaj Auto Limited to further the group’s interest in financial services. Bajaj Finserv is the holding company for the businesses dealing with financial services of the Bajaj Group.
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