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Bajaj Finserv Gains 4% as Board to Consider Bonus Share, Stock Split Plan

Bajaj Finserv rose 4% to Rs 13,096.80 on BSE in intraday trade on Tuesday after the company announced that its board will consider an initial dividend offering and a stock split plan on Thursday, July 28, against an otherwise weak market in 2022.

At 09:26 am, the stock was up 2.6% at Rs 12,935, while the S&P BSE Sensex was down 0.47%. At 09:52 am, Bajaj Finserv was quoted at Rs 12,850 on the BSE, up Rs 239.35 or 1.9%.

The stock hit a 52-week high of Rs 19,319.95 and a 52-week low of Rs 10,777.00 on October 19, 2021, and July 1, 2022, respectively.

Currently, it is trading 33.49% below its 52-week high and 19.24% above its 52-week low.

On Monday, Bajaj Finserv, in its exchange filing after market hours, said: “The board of directors, at its meeting scheduled for July 28, 2022, will also consider proposals to subdivide the company’s shareholding with a face value of Rs 5 or issue fully paid bonus shares to the company’s members, or both”.

Earlier on June 27, Bajaj Finserv announced that it would hold a meeting of the company’s board of directors on Thursday, July 28, 2022, to review the unaudited financial results for the quarter ended June 30, 2022 (Q1FY23), among others.

A stock split is a corporate action in which a company divides its stock into multiple new shares. Splitting shares neither adds any new value nor dilutes shareholder ownership. What they did, however, was increase the number of shares in the company.

The main benefit of a stock split is that the liquidity of a company’s stock generally increases. As retail investors now have easier access to stocks, more will show increased demand for stocks, increasing OTC liquidity. It is much easier to buy and sell stocks after a stock split.

Bajaj Finserv has outperformed the market over the past month, rising 12%, while the S&P BSE Sensex gained 5.3%. However, the stock has underperformed the market over the past three months, down 15% compared to the benchmark’s 2% decline.

In Q1FY23, Bajaj Finserv’s consolidated revenue is expected to grow by 25.8% YoY to Rs 17,542 crore on the back of a pick-up in the lending business and continued healthy traction in premium growth.

Bajaj Finserv has risen more than 22% this month from a low of Rs 10,727 touched on July 1. Additionally, the stock has managed to hold above the 20-day and 50-day moving averages for the past six sessions.

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