Bajaj Finance Stock Split & Bonus: What It Signals for NBFC Sentiment

Bajaj Finance, India’s largest non-banking financial company (NBFC), has just announced a twin corporate move—a 1:2 stock split and a 4:1 bonus issue, with the record date set for 16 June 2025. At first glance, it might look like just another investor-friendly move. But dig deeper, and this bold announcement signals something bigger: rising confidence not just from the company but across India’s NBFC sector.

Let’s unpack what this move could mean not just for Bajaj Finance investors but for India’s broader shadow banking landscape.

A Closer Look at the Corporate Actions

On 29 April 2025, alongside its Q4 FY25 results, Bajaj Finance’s Board announced a stock split in a 1:2 ratio—meaning every ₹2 face value share will be split into two shares of ₹1 each. In parallel, the company approved a 4:1 bonus issue for every one share held post-split; shareholders will receive four bonus shares for every one share held.

This split effectively means that every share of ₹2 face value will be converted into 10 equity shares of ₹1 each, resulting in a 10-fold increase in the number of outstanding shares for each investor.

Bajaj Finance also announced its highest-ever dividend payout of ₹56 per share, which includes a ₹44 final dividend and a ₹12 special dividend. While such moves are traditionally viewed as shareholder-friendly, the implications here run deeper.

Reading the Sentiment Behind the Move

The stock split and bonus issue might seem like cosmetic changes on the surface. They don’t change the company’s intrinsic value. However, they serve several strategic purposes:

1. Improved Liquidity: By lowering the price per share, the split and bonus issue makes the stock more accessible to retail investors. This typically results in increased trading activity and improved liquidity in the stock.

2. Wider Retail Participation: Bajaj Finance’s stock price had recently touched highs of ₹9,660, which can be prohibitive for small investors. A post-split price point that is lower allows for broader participation, thereby democratising ownership.

3. Strong Performance Confidence: Only companies with robust fundamentals and growth visibility opt for such aggressive shareholder rewards. Bajaj Finance’s Q4FY25 results back this up, with a 19% YoY increase in consolidated net profit to ₹4,545.6 crore and 26% YoY growth in assets under management (AUM) to ₹4.17 lakh crore.

NBFC Sector Implications: A Sentiment Barometer

Bajaj Finance isn’t just another NBFC—it’s seen as the benchmark for the entire sector. Following a solid financial performance, this move sends a clear message: top-tier NBFCs are resilient and optimistic about medium-term growth.

Here’s what this action could mean for the sector:

• Valuation Premium Strengthened: Bajaj Finance continues to command a premium in the market thanks to its consistent execution and strong asset quality. This move reinforces market conviction in its RoA (Return on Assets) and RoE (Return on Equity) guidance, estimated at 4.5-4.6% and 19-21%, respectively.

• Investor Appetite for Quality NBFCs: In an environment where bank stocks are being reassessed due to macro uncertainty, strong NBFCs like Bajaj Finance are becoming more attractive, especially with such shareholder-friendly initiatives.

• Sector-Wide Rerating Potential: When a sector leader demonstrates such aggressive capital actions, it can trigger rerating prospects for peer NBFCs, especially those with similar digital reach, asset quality, and profitability metrics.

Market Reaction So Far

The market has responded positively. Since the announcement, Bajaj Finance shares have [rallied over 9%, closing at ₹9,373.05 on 6 June 2025. Year-to-date, the stock has already gained 35%, adding over ₹1.5 lakh crore in investor wealth and pushing the company’s market cap close to ₹6 lakh crore.

Analyst confidence mirrors market sentiment. Axis Securities forecasts 25–26% CAGR growth in earnings and assets over the medium term, citing steady Net Interest Margind (NIMs) and improving cost efficiencies. While BNP Paribas maintains a neutral stance, it has raised its target price to ₹11,120, acknowledging Bajaj Finance’s consistent delivery and leadership.

Conclusion

In the world of finance, corporate actions often do more than just shuffle numbers; they reflect sentiment, signal strategy, and shape investor perception. The recent stock split and bonus issue implemented by Bajaj Finance meet all of these criteria. For the broader NBFC space, it’s a signpost that the sector is entering a phase of renewed confidence and capital market engagement.

As 16 June draws near, everyone will be closely monitoring Bajaj Finance, not only to monitor the share price but also to decipher its implications for the future of India’s emerging banking stars.