Bajaj Finance share price: Shares of Bajaj Finance came under intense selling pressure on Friday, August 7, to emerge as the worst-performing Sensex constituent. The blue-chip NBFC stock tanked 5.5 per cent to ₹1,086 on the BSE. It eroded over ₹33,500 crore from investor wealth in a span of just over an hour as the total market capitalisation dipped to ₹6.82 trillion from ₹7.15 trillion as on Thursday.
Why are Bajaj Finance shares down?
The weakness in Bajaj Finance and select NBFCs came after the Reserve Bank of India’s (RBI’s) proposal to allow them to offer only term loans and discontinue revolving credit products, except for NBFCs authorised to issue credit cards.
The central bank has proposed that NBFCs shall only offer credit products that are in the nature of term loans and not offer any revolving credit products. There are only two NBFCs that offer credit cards — SBI Card and BoB Cards.
Term loan refers to a fund-based credit facility of a fixed principal amount, made available by an NBFC to a borrower, wherein the sanctioned limit is disbursed in one or more instalments and is repayable in accordance with a predetermined amortization schedule.
The draft rules could significantly affect Bajaj Finance because it has a large presence in flexi loans, one of its key lending products, said Abhinav Tiwari, research analyst at Bonanza. Although Bajaj Finance has not disclosed the exact share of flexi loans in its loan book, we estimate that they could account for nearly 25 per cent of its assets under management (AUM), Tiwari added.
Seema Srivastava of SMC Global said that although the draft norms are not yet final and implementation is expected to be phased, the market has begun pricing in the possibility of lower medium-term earnings growth.
She believes that these measures could increase credit costs, reduce reported profitability and moderate return ratios for retail-focused NBFCs like Bajaj Finance over time.
Q1 FY27 performance of Bajaj Finance remained robust with PAT rising 27 per cent year-on-year (Y-o-Y) to ₹5,986 crore, NII growing 23 per cent, assets under management (AUM) increasing 24 per cent to ₹5.47 lakh crore, and 20 per cent growth in new loan bookings.
Asset quality also improved, with GNPA declining to 0.96 per cent and NNPA to 0.39 per cent, while the company maintained a healthy CRAR of 20.9 per cent, indicating strong capital adequacy.
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