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Bajaj Finserv stock split: NBFC-giant Bajaj Finserv shares are set to turn ex-split this week. The company will split one existing equity share into five equity shares. Ahead of the stock split and bonus issue, Bajaj Finserv shares witnessed a volatile week from September 5 to 9. However, in a month, Bajaj Finserv shares have climbed nearly 10% on Dalal Street, making many investors rich. The stock still has potential for further upside going forward.
Last week, on Friday, Bajaj Finserv shares closed at ₹17,202.65 apiece down by ₹178.80 or 1.03%. The company's market cap is around ₹2,74,006.47 crore.
In a month (from August 10 to September 9), the shares have gained nearly 10%. In August month, Bajaj Finserv shares were among the best performers on Sensex and Nifty 50 with nearly 13% upside each.
1. The NBFC will split each existing equity share having a face value of ₹5 each into five equity shares having a face value of Re 1 per equity share fully paid up. The ratio of the stock split is 5:1.
2. Bajaj Finserv has set September 14 as the record date for determining eligible shareholders for the stock split benefit.
3. Thereby, the ex-stock split date is on September 13. In general terms, the ex-split is the date on which a stock is trading without the benefit of the corporate action, in this case, the stock split. The ex-split date is one or two days before the record date.
4. On its website, ICICI Direct stated that if you buy the shares of Bajaj Finserv on12th September those shares should be credited to your Demat account on 14th September (i.e. the record date) thus making you eligible for the bonus and the split.
5. Among many benefits of the stock split, is also that these shares become more affordable for both existing and new investors. Also, the move boosts the listed company's liquidity. Through the stock split, Bajaj Finserv plans to encourage small potential shareholders to partake in the company's future.
6. Giving rationale to the stock split, Bajaj Finserv last month stated that the Company and its subsidiaries have grown significantly, in terms of business and performance, over the years. This is reflected in the share price of the Company, which touched a peak of Rs. 19,325 in October 2021. The price since then has hovered around ₹12,200. Currently, the retail/individual shareholders comprise 98% of the total number of shareholders holding around 17.52% of the paid-up value of shares. Amongst its peers, the share price of the Company is one of the highest while having one of the smallest capital bases. As and when the stock price rises further, it will be increasingly difficult for small potential shareholders to partake in the company's future.
7. In a stock split, the listed company increases the number of shares that are outstanding by issuing more shares to eligible shareholders. The stock split also decreases the market price of the individual shares, however, does not result in changing the market capitalization of the company. In the case of Bajaj Finserv, an eligible shareholder will receive 5 shares on their one existing share, thereby, it increases the number of Bajaj Finserv shares in their portfolio. The price of Bajaj Finserv shares will also become cheaper and affordable for both new and existing investors.
7. According to market guidelines, a company can fix a record date for corporate actions like dividends, stock split, and bonus issues only after receiving approval from shareholders. Bajaj Finserv received approval on September 2 for the stock split through a postal ballot from the members of the company.
9. As of June 30, 2022, according to the shareholding pattern, Bajaj Finserv has 2,99,380 shareholders with 15,91,37,444 fully paid-up equity shares.
10. The company plans to complete the stock split process on or before September 26, as per the regulatory filing. However, the company had also informed exchanges that "14,417 equity shares of the face value of ₹5 rights entitlements are kept in abeyance. In case any claim is received and processes by the Company, pre and post-issued, paid-up, and subscribed capital will undergo change to that effect."