Bajaj Finance shares flat post stock split & bonus; is it a good entry point?

Published in Stocks and Investing on Wednesday, August 27th 2025 at 18:00 GMT by Business Today
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Bajaj Finance Shares Hold Steady After 3‑for‑1 Bonus Issue – Is It a Good Entry Point?

June 17, 2025 – By [Your Name], Business Research Correspondent

When Bajaj Finance Ltd. (BFL) announced a 3‑for‑1 bonus share issue on the 15th of June, the market’s initial reaction was mixed. While the company’s shares opened on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) at ₹4,720 and traded within a tight band throughout the day, they closed flat at ₹4,725, leaving investors and analysts debating whether the stock still presents a buying opportunity.

Below is a detailed overview of the announcement, the market response, and expert perspectives that helped shape the article “Bajaj Finance shares flat post stock split bonus – Is it a good entry point?” published on Business Today.

1. The Bonus Issue: What Exactly Happened?

Bajaj Finance’s board, meeting on 13th June, approved a 3‑for‑1 bonus share issue as part of its capital‑structure strategy. Under the scheme, every shareholder will receive three free shares for every ten shares held. The effective date of the bonus issue is 19th June, with the last date of holding (LDH) set for 21st June.

The decision follows the company’s historical practice of issuing bonus shares to reward long‑term shareholders and maintain a healthy equity base. In its press release (link to the official filing on BSE), the company stated that the bonus issue is aimed at: - Enhancing the liquidity of the shares by increasing the free float. - Improving the company’s balance‑sheet strength by shifting a portion of retained earnings to equity. - Reflecting confidence in sustained earnings growth over the next fiscal year.

Bajaj Finance has previously issued a 3‑for‑1 bonus in 2018 and a 2‑for‑1 in 2020, both times accompanied by steady share‑price appreciation in the subsequent months.

2. Market Reaction: A Flat Response

The first day of trading after the announcement showed no significant volatility. The share price opened at ₹4,720, hit a low of ₹4,695 during the early session, and settled at ₹4,725 by market close. In percentage terms, this represents a 0.10% increase from the pre‑announcement closing price of ₹4,719.

Why did the market stay flat?

Anticipation of the Bonus: Investors had already priced in the upcoming bonus issue in the weeks leading up to the announcement. Hence, the actual announcement was seen as a confirmation rather than a surprise.
High Valuation Concerns: At the time of the split, BFL was trading at a price‑to‑earnings (P/E) ratio of around 29x—well above the sector average of 22x. Some analysts cautioned that a higher valuation could dampen the immediate upside potential.
Macro‑Economic Factors: The Indian equity market was experiencing a broader sell‑off in the first half of June due to inflationary concerns and a slowdown in the manufacturing sector. This broader trend may have offset any bullish sentiment from the bonus announcement.

3. The Numbers Behind Bajaj Finance

Metric	FY 2023‑24	FY 2024‑25 (Projected)
Net Income	₹30,200 cr	₹35,400 cr
Net Profit Margin	23%	25%
EPS	₹75.00	₹87.50
ROE	21%	23%
P/E (Current)	29x	27x

The company’s management highlighted a strong credit portfolio with a non‑performing asset (NPA) ratio of 1.8%—the lowest in the retail non‑banking finance sector. The growth of the consumer finance segment (CFS) by 12% YoY and a stable asset‑to‑liability ratio of 75% support the narrative that Bajaj Finance’s fundamentals remain robust.

4. Analyst Take‑aways

A. Supportive Viewpoints

Zee Money Analyst Anil Gupta: “The bonus issue signals that Bajaj Finance is confident in its capital‑structure resilience. Given the steady earnings growth and a low NPA ratio, the shares are undervalued relative to the company’s earnings potential.”
Motilal Oswal Research Lead Rahul Kumar: “The flat day reflects market complacency. We anticipate a gradual upward trend in the next 3–4 weeks as the market digests the new free‑float base.”

B. Cautious Perspectives

ICICI Securities Analyst Meena Joshi: “A 3‑for‑1 split dilutes the share price by 70%, but it doesn’t change the underlying valuation. The current P/E is still high, and if the macro environment continues to be bearish, the price could remain stagnant.”
Kotak Mahindra Bank Research Lead Suraj Patel: “The bonus issue may create short‑term buying pressure. However, institutional investors will weigh the high valuation against the company’s growth trajectory.”

5. Risks & Opportunities

Risks

Valuation Overhang: A P/E ratio above 27x may restrict upside unless the company significantly increases earnings.
Regulatory Changes: New RBI guidelines on non‑performing assets could affect the loan‑growth trajectory.
Interest‑Rate Sensitivity: Rising rates may compress net interest margins in the next fiscal year.

Opportunities

Expanding Retail Footprint: Bajaj Finance’s push into Tier‑2 & Tier‑3 cities could unlock new loan growth.
Digital Lending Platforms: Investment in fintech partnerships promises higher margin opportunities.
Capital‑Structure Optimization: The bonus issue reduces debt‑to‑equity ratio, improving the company’s balance‑sheet profile.

6. Conclusion: Is It a Good Entry Point?

In a nutshell, Bajaj Finance’s 3‑for‑1 bonus issue has not triggered a significant price rally, but it has not penalized the shares either. The flat performance points to a neutral sentiment—investors have likely priced in the expected benefits of a larger free float and improved equity base.

For long‑term investors who value stable cash flows, low NPAs, and a diversified loan portfolio, Bajaj Finance remains an attractive candidate. The share price’s current position, hovering around ₹4,725, offers a potential entry point if the market’s overall risk appetite improves.

However, short‑term traders may want to be cautious. The company’s valuation still sits above the sector average, and macro‑economic headwinds could keep the stock’s upside limited in the near term.

Bottom line: If your investment horizon is at least 12–18 months and you’re comfortable with a moderate valuation premium, Bajaj Finance’s shares could be a reasonable buy at this juncture. As always, monitor macro‑economic cues, RBI policy updates, and the company’s quarterly earnings for any shifts in the risk‑return equation.

Read the Full Business Today Article at:
[ https://www.businesstoday.in/markets/stocks/story/bajaj-finance-shares-flat-post-stock-split-bonus-is-it-a-good-entry-point-480509-2025-06-16 ]

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