The shares of Bajaj Finserv gained 5.40% on Tuesday’s intraday trade as it fixed the record date for its stock split and bonus issue, as a double bonanza for investors.

Bajaj Finserv in a regulatory filing said that the board has set the date of September 14, 2022, (record date) to decide which shareholders are eligible for bonus shares and stock split benefits. 

Accordingly, the share will start trading ex-split and ex-bonus on September 13, 2022. Its shares closed at ₹ 16958.75 on Tuesday.

In the past three months, the company has outperformed the market by surging 30 per cent, as compared to a 4.5 per cent rise in the S&P BSE Sensex.

The consumer finance company has approved a stock split in the ratio of 1:15, which means that each equity share of the company having a face value of ₹ 5 will be split into five shares with a face value of ₹ 1.

Further, its bonus shares will be issued in the ratio of 1:1. This means that one equity share with a face value of ₹1 each will be issued for every full paid-up equity share of ₹1. The company intends to complete these corporate actions before September 26, 2022.

For this, the company will have to amend the capital clause of its memorandum of association, subject to the approval of the shareholders of the company. 

Post split, its authorized share capital will be 1 billion equity shares with a face value of ₹ 1 each. However,  its paid up and subscribed shares capital will rise to 9.64 crore shares, with the same face value.

Ultimately, its authorized capital will be 2 billion equity shares with a face value of ₹ 1 each, post the bonus shares issue. Further, its total paid up and subscribed capital will be increased to 1.59 billion shares with a face value of ₹ 1 each.

“The company and its subsidiaries have grown significantly, in terms of business and performance, over the years. Among 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,” Bajaj Finserv said in a regulatory filing as it highlights the rationale behind the split and bonus issue.

In a letter released in July, the company further added that it will become more challenging for small potential shareholders to participate in the company’s development as and when the stock price rises further. Keeping with the spirit of inclusion and in order to reward the shareholders, the board of directors approved and recommended the said corporate actions, the company said.

Currently, individual or retail shareholders comprise 98 per cent of the total number of shareholders of the company and they hold about 17.52% of the paid-up value of the shares.

Bajaj Finserv is a non-banking financial company that is involved in the marketing of financial services like investing insurance and brokerage. It is a financial conglomerate that has an interest in the financing, life, and general insurance sectors (Bajaj Finance, Bajaj Life, and Bajaj General Insurance). 

Written by Simran Bafna

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