Home / Markets / Stock Markets /  Bajaj Finserv bonus shares issue, stock split's record date next week. Key things to know

Bajaj Finserv shares will trade ex-split and ex-bonus next week as the company fixed Wednesday, 14 September 2022 as the 'record date' for the purpose of determining the members, eligible for the sub-division of existing equity shares and issue of bonus equity shares of the company.

While declaring its Q1FY23 results, Bajaj Finserv had 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.

Explaining the rationale behind the stock split and issue of bonus shares, Bajaj Finserv had said that the company and it's 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 19,325 in October 2021.

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. Keeping with the spirit of inclusion and in order to reward the shareholders. the Board of Directors. at its meeting held today, approved and recommended the said corporate actions," Bajaj Finserv said.

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 are up nearly a per cent in 2022 (year-to-date) so far whereas they are down about 2% 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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