Bajaj Finance Stock Split and Bonus Issue: No, Your Shares Didn't Crash 90%

If you are an investor in Bajaj Finance, you might have gotten a shock on the morning of June 16. When you checked your account, it might have looked like your investment had crashed by a massive 90%, with the share price falling from over ₹9,000 to under ₹1,000. But don't worry, your money is safe. This was not a market crash.

This article will explain why this happened by breaking down the stock split and the bonus issue. But more importantly, we'll go beyond the math to uncover what these moves signal about the company's confidence, its future plans, and what you should really be focusing on as an investor right now.

What Really Happened to the Share Price?

The dramatic change in Bajaj Finance's share price is due to two pre-planned corporate actions.

The first was a 4:1 bonus issue. Think of this as a gift from the company. It gives existing shareholders four free, extra shares for every one they own, often as a sign of confidence in future profits.

The second was a 1:2 stock split. This is like exchanging one expensive share for two cheaper ones. The main reason a company does this is to make its high-priced shares more affordable and attractive to small investors, even though the total investment value stays exactly the same.

Together, these actions increase the number of shares you own, so the price of each share is adjusted downwards to ensure the total value of your investment remains unchanged.

Also Read: Difference between Bonus Shares and Stock Split: What are the pros and cons for both?

Let's Break It Down with a Simple Example

Suppose an investor named “Aarav” held 1 share of Bajaj Finance, which was trading at ₹9,340 before these changes.

Step 1: The Bonus Issue (4:1)

• First, Aarav receives 4 free bonus shares for his 1 existing share.
• Aarav’s total shares now: 1 (original) + 4 (bonus) = 5 shares.

Step 2: The Stock Split (1:2)

• Next, each of those 5 shares is split into 2.
• Aarav’s final share count: 5 shares × 2 = 10 shares.

So, Aarav’s original 1 share has now become 10 shares. To keep his investment value the same, the price per share is adjusted down.

• New Adjusted Price = Old Price ÷ New Number of Shares
• ₹9,340 ÷ 10 = ₹934 per share

This is why the price appeared to crash. The value didn't disappear; it was just distributed across more shares. The market price of around ₹934 simply reflects normal market movement after this adjustment. After the closing bell of the market on June 16, 2025, Bajaj Finance's share price stood at ₹938.5.

Beyond the Math: What These Actions Really Mean for Investors

This is the most important part. These changes are more than just a technical adjustment. They send important signals about the company's strategy and confidence.

Making the Stock More Accessible to You: The main reason for these actions is to make the shares more affordable for everyday retail investors. A stock price of over ₹9,000 can seem intimidating or out of reach for many. By bringing the price down to under ₹1,000, the company makes it psychologically easier for more people to invest, which can increase trading volume and widen its shareholder base.

A Strong Signal of Confidence: A bonus issue is often a sign of a company's confidence in its own future. This confidence isn't just a feeling; it's built on a foundation of strong performance. For the full financial year, Bajaj Finance's profit grew by 16% to over ₹16,700 crore. Its Assets Under Management or AUM (the total value of all loans it has given out) grew by a massive 26% to reach ₹4.16 lakh crore. Meanwhile, growth in its customer base also crossed 10 crore (100 million) people, which means that nearly 1 in every 15 Indians is now a Bajaj Finance customer. By increasing the number of shares, the company is signaling that it expects its future earnings to be strong enough to support this larger equity base.

Focus on the Business, Not Just the New Price: After a split, it's easy to get excited about a cheaper price, but smart investors look deeper. The real value comes from the company's ability to manage its risks well.

• The Good News: Bajaj Finance’s Net NPA stood at just 0.44% as of March 2025, reflecting the strength of its lending operations. Net NPA, or Net Non-Performing Assets, indicates the portion of bad loans after accounting for provisions already made to cover potential losses. A low figure like this suggests that the company is well-prepared for credit risks and has managed its loan book conservatively and efficiently.
• The Part to Watch: However, it's also important to see the full picture. The company itself has noted some challenges, especially in its rural lending business, and has set aside more money to cover potential future losses. While its overall health is strong, investors should keep an eye on how it manages this specific segment.

A Clear Plan for the Future: Looking ahead, the company has given clear guidance. It expects its loan book (AUM) to grow by another 25-27% and its profits to grow by 23-24% in the next financial year. While this is slightly slower than before, it shows a prudent and realistic approach in the current environment. This clarity helps investors know what to expect and how to judge the company's performance going forward.

Also Read: Bajaj Finance Q4 FY25 Revenue Grows 24%, Announces ₹56 Dividend

Conclusion

The apparent 90% crash in Bajaj Finance's share price was not a loss of wealth, but a deliberate and positive restructuring. These moves show a confident management team making the stock more accessible for future investors. The key takeaway is, while the share price has changed, the company's strong fundamentals, its impressive profit growth, massive customer base, and healthy loan book, have not. The expert advice to buy on dips is rooted in this underlying strength. For a long-term investor, the focus should not be on the new, lower price, but on the consistent performance of the business behind the stock.

Disclaimer

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