Bajaj Finance Bonus Issue & Stock Split: A Sweet Deal or a Stock Market Trap?

Getting something for free, or even at a great discount always brings a special joy. Whether it's a "Buy One, Get One" deal or snagging a quality product at a steal. The excitement of receiving more for less is truly unmatched.

In investing space, these perks come in the form of bonus shares and stock splits.

Bonus shares are extra shares given to existing shareholders at no cost, while a stock split increases the number of shares by splitting the face value, making each share more affordable and easier to trade.

Recently, Bajaj Finance, India's largest NBFC, made waves with both a bonus issue and a stock split announcement.

Here's all you need to know.

• The board of the company on 29 April 2025 approved the 4:1 bonus issue. This means Bajaj Finance will issue four bonus shares to its shareholders for every one share held.
• Bajaj Finance's board also approved a 1:2 stock split, where one share of face value Rs 2 will be split into two shares of face value Re 1 each.
• The record date to determine the eligibility of the shareholders set to receive the final dividend has been set on 30 May.
• The exercise of bonus shares and the stock split will be completed on or before 27 June 2025.

How Does This work?

A shareholder owns 50 shares of Bajaj Finance as a record date, a 4:1 bonus issue means that they will receive 200 additional shares (4 bonus shares for every 1 share). This takes their total shareholding to 250 stocks.

Subsequently, the number of stock-divided stocks in the ratio of 1:2 will double. Therefore, 500 shares will be formed from the 250 shares.

In short, after the completion of both the bonus issue and stock split, a shareholder with 50 shares initially will end up with 500 shares.

The stock price will fall in proportion to reflect this.

Bonus & Stock Split History

This is the first instance in nine years that the company will be issuing bonus shares.

The last bonus issue from India's largest non-banking financial company was in September 2016 in the 1:1 ratio.

This means one bonus share for every one share held by its shareholders.

Bajaj Finance had also split one share of Rs 10 into five shares of Rs 2 each back in 2016.

446	Corporate Action	Ratio	Details
2016	Bonus Issue	1:1	One bonus share for every one share held
2016	Stock Split	1:5	One share of Rs 10 split into five shares of Rs 2
2025 (Upcoming)	Bonus Issue	4:1	Four bonus shares for every one share held
2025 (Upcoming)	Stock Split	1:2	One share of Rs 2 to be split into two shares of Rs 1

Source: Equitymaster

Is This a Sweet Deal?

At first glance, Bajaj Finance's bonus issue and stock split might seem like a great deal more shares for existing investors and a lower price per share, making it feel like a win. It's definitely something that gets the market buzzing.

But here's the thing: While you'll end up with more shares, the company's value won't change. The fundamentals will stay the same.

However, if you believe in Bajaj Finance's long-term story, then it could be a sweet deal. If you're only chasing the hype, though, it could turn into a market trap.

A Look at the Financials

For the March 2025 quarter, the company's net interest income (NII) came in at Rs 98.1 bn, up 22%. Its net profit jumped 17% to Rs 44.8 bn.

Assets under management (AUM) grew by 26% to Rs 4,166.6 bn as of 31 March 2025 from Rs 3,306.2 bn as of 31 March 2024.

On the asset quality front, gross NPA and net NPA stood at 0.96% and 0.44%, respectively.

Bajaj Finance also hit a key milestone during the quarter, crossing 10 crore customers.

Bajaj Finance's Financial Snapshot (FY20-24)

(Rs m, Consolidated)	FY20	FY21	FY22	FY23	FY24
Net interest income (NII)	167,661	1717,702	217,858	287,096	360,835
NII Growth (%)	42.5	2.4	26.9	31.8	25.7
Net Profit	52,638	44,198	70,282	115,077	144,512
Net Profit Margin (%)	20	16.6	22.2	27.8	26.3
Return on Equity (%)	16.4	12.1	16.2	21.4	19.1

Source: Equitymaster

Over the past five years, its net profit has compounded at a CAGR of 29.3%. In terms of return ratios, the company's five-year average ROE is 17%.

Dividend Approved

Bajaj Finance has declared a special interim dividend of Rs 12 per share for the financial year ending 31 March 2025. The special dividend will be paid on or around 26 May 2025.

In addition, the company has proposed a final dividend of Rs 44 per share for the same financial year. This will be paid around 28 July 2025.

What Next?

Bajaj Finance has placed its five-year development roadmap under the banner of "BAF 3.0" as part of its long-range strategy (LRS) for 2025-29.

The scheme was unveiled on 10 December 2024 during Bajaj Finserv's Investor Day, the scheme focuses on expanding customer access, embracing green finance and integrating Artificial Intelligence (AI) in its operation.

The company aims to increase its assets to 4 trillion rupees under management (AUM) and expand its customer base.

Till then it's planning more than 40 million loans. By FY29, it envisions a customer base of 190-210 million and a retail credit market share of 3.8-4.2%, as well as a return on equity (RoE) of 20-22%.

To operate efficiently, the company has rolled out generic AI in 25 commercial functions, including 29 use cases. These initiatives are expected to save Rs 1.5 billion annually in operating costs starting from FY26.

It expects to surpass 30 million Account Aggregator (AA) consents, which will further enrich customer insights and aid in personalised product offerings.

How Shares of Bajaj Finance have Performed Recently

The share price of Bajaj Finance is up 24% so far in 2025. However, it's down over 7% in the last five days.

Over the past one year, shares of the company have gained 25%.

The stock touched its 52-week high of Rs 9,709.75 on 24 April 2025 and its 52-week low of Rs 6,376.6 on 4 June 2024.

About Bajaj Finance

Bajaj Finance is engaged in the business of lending.

The company has a diversified lending portfolio across retail, SME and commercial customers with a significant presence in urban and rural India. It also accepts public and corporate deposits and offers variety of financial services products to its customers.

It is one of the largest companies in the consumer lending space, especially in electronics. The company has a presence in over 4,100 locations with over 134,000 distribution points of sale.

It has one of the largest customer bases of over 83 million (m) and manages assets of over Rs 3,306 billion (bn).

For more details, see the Bajaj Finance company fact sheet and quarterly results.

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