Bajaj Finserv announces bonus issue, stock split; shares zoom
- Bajaj Finserv's board has approved bonus shares issue in the ratio of 1:1
While declaring its financial results for the first quarter ended June 2022, Bajaj Finserv on Thursday said that its board has also approved the proposal of stock split or sub division of equity shares in the ratio of 1:5 as well as gave its nod for the issuance of bonus shares in the ratio of 1:1. Shares of Bajaj Finserv zoomed more than 9% on the BSE to ₹14,511 apiece.
“The board has approved sub-division of each existing equity share of face value of ₹5/- into Five equity shares of face value of ₹1/- fully paid- up. It also approved the issue of one bonus equity shares of face value of ₹1/- for every 1 fully paid-up equity share of ₹1/-,” the financial services company announced in an exchange filing today.
For Q1FY23, Bajaj Finserv's consolidated net profit surged about 57% to ₹1,309 crore as compared to ₹833 crore in the same quarter last year. The profit includes the unrealised MTM loss of insurance subsidiaries of ₹283 crore as against gain of ₹25 crore year-on-year (YoY).
Meanwhile, its revenue rose about 14% to ₹15,888 crore vs ₹13,949 crore in the year ago quarter. The company's consolidated assets under management (AUM) crossed a milestone of ₹200,000 crore in Ql FY23.
A stock split increases the number of shares that are outstanding by issuing more shares to the current shareholders. Stock split decreases the market price of the individual shares, however, does not result in changing the market capitalization of the company.
A company engages in stock split decision to make its stock more affordable if its price levels are very high, which in thus would lead to increase in liquidity in the stock. Meanwhile, bonus shares are fully paid additional shares issued by a company to its existing shareholders.
Bajaj Finserv shares have declined more than 15% in 2022 (year-to-date) so far whereas they are up about 4% in a year's period. Bajaj Finserv is focused on lending, asset management, wealth management and insurance services.
The company was formed in 2007 as a result of its demerger from Bajaj Auto Limited to further the group's interest in financial services. Bajaj Finserv is the holding company for the businesses dealing with financial services of the Bajaj Group.
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