On June 16, 2025, the unexpected 90% fall of Bajaj Finance on the stock exchange shocked many investors, as the price of the stock fell from ₨9300 to ₨930. At first appearance, this huge price drop in stock price triggered concern and confusion among retail investors and trading platforms. Although, this drop did not happen due to negative news or bad company performance but it is a consequence of technical adjustments of bonus issue a 4:1 and stock splits a 1:2, both of which took effect on the same day.
Let’s simplify this, Bajaj Finance had announced a stock split in a 1:2 ratio which means the face value of each share ₨2 was split into two shares of ₨1 each. Additionally, the bonus shares are also issued in a 4:1 ratio, in these shareholders received 4 bonus shares of every 1 share. In short, for every 1 share held before this action, the person now owns 10 shares. As a consequence, the price of shares adjusted in similar proportion-plunges to about one-tenth of its previous value but total holding value remained the same. This significant drop in the price of stock often creates temporary confusion in investors’ minds as trading platforms show a fall in price without reflecting the updated quantity of shares. In fact, many investors see this as a positive move because there is no real loss to investor’s value. After increasing the number of shares and reducing per-share price, the company wants to improve stock liquidity, reward its existing shareholders, and attract retail investors. Bajaj Finance has also used this strategy in the past, having conducted similar corporate actions in 2016.
Despite the initial fall, the stock gained 2% over intraday post-adjustment, indicating investor confidence in company fundamentals. Due to the company’s consistent, strong asset quality and benefits from softer interest rates expected in upcoming months, remain investors bullish on stock.
Reasons and Impact of Bonus & Stock Splits
The main reason for this decision was to enhance the stock liquidity, broaden the investor base, and make shares more affordable for small investors. Bajaj Finance aims to attract more retail participation and improve market accessibility by lowering the share price. This step also indicates management confidence in the company’s future growth and strong fundamentals.
The sudden impact of this decision was a visual drop in share price, which may confuse normal investors. Meanwhile, the company’s corporate action does not affect its earnings, market capitalization, or financial health. In fact, these decisions of the company reflect its efforts to reward its shareholders by increasing trading activity in stock.
In short, today’s 90% fall in share price is nothing more than a bookkeeping adjustment and not an effect of the company’s business outlook. Investors should stay informed and be required to understand the math behind corporate actions like bonus issues and stock splits before arriving to any decision.
Company Profile
Bajaj Finance Limited is a non-banking financial company (NBFC) and is one of the leading companies in the sector. The company offers multiple financial products including business loans, personal loans, consumer durable loans, loans against property, credit cards, and fixed deposits. Bajaj Finance serves both SME and retail customers through a strong physical and digital distribution network.
