about 6 hours ago

Bajaj Finance Price Drop: Technical Repricing from Bonus and Stock Split

On June 17, 2025, shares of Bajaj Finance Ltd. $BAJFINANCE.NS registered a dramatic price correction of over 90%. The move was purely mechanical, triggered by the execution of two corporate actions: a 4:1 bonus issue and a 1:2 stock split. The adjustments, taken together, increased the total number of outstanding shares tenfold, proportionally reducing the stock’s face value. Despite the sharp decline in per-share price, the company’s market capitalization and shareholder value remained unchanged. The temporary gap between adjusted market prices and uncredited bonus shares in demat accounts caused short-lived confusion.

Impact on Shareholder Accounts

The lag in reflecting bonus shares in investor demat holdings led to inaccurate portfolio valuations on June 17. While share prices were adjusted immediately on the exchange, bonus credits will only be visible after processing by June 27, as per depository timelines. This mismatch created a perceived erosion of portfolio value, though economically no loss occurred. Investors holding through the record date retain full ownership rights, which will be fully restored once share credits finalize.

Market Stability and Price Mechanics

The stock’s adjusted price temporarily affected sentiment, algorithmic trading models, and margin thresholds. However, this drop does not reflect earnings revisions, balance sheet concerns, or sectoral headwinds. Institutional investors, aware of the mechanical nature of the event, remained neutral.

Historically, such adjustments have minimal long-term impact on fundamentally sound companies. Bajaj Finance’s core metrics remain intact, and trading volumes suggest no panic-driven exits post-adjustment.

Outcomes from the Adjustment

Greater accessibility to retail investors due to a lower entry price;
Increased trading liquidity from expanded free float;
Expanded inclusion potential in smaller-ticket portfolios and ETFs;
No change in EPS on an aggregate basis; per-share earnings diluted arithmetically;
Neutral effect on long-term valuation, assuming stable fundamentals.

Conclusion: Optical Decline, Not Economic Loss

The significant price correction in Bajaj Finance shares reflects a structured capital adjustment, not a market reassessment of value. The stock’s tenfold realignment was driven by internal corporate actions and does not signal investor flight or financial deterioration. Once demat accounts are updated with bonus entitlements, perceived discrepancies will resolve. For investors, the event underscores the importance of understanding corporate actions before interpreting price shifts.