The drop in share price is not a loss in value, but due to a stock split and bonus shares issued by the company. While the number of shares increased, the price per share reduced proportionally, keeping the overall investment value unchanged.
What is a Stock Split?
A stock split is when a company divides its existing shares into multiple new shares. The most common purpose is to make the stock more affordable and increase liquidity in the market.
Example in Bajaj Finance's case:
Old face value: ₹2 per share
New face value after split: ₹1 per share
Split ratio: 1:1 → Every 1 share of ₹2 is split into 2 shares of ₹1
This does not change the overall value of your holdings, but doubles the number of shares you own, while halving the price per share
What is a Bonus Share?
A bonus share is a free share given to existing shareholders, typically from the company’s accumulated reserves. It rewards shareholders and increases the total number of shares in the market.
Bajaj Finance bonus share ratio: 1:1
This means for every 1 share held (after the split), investors get 1 additional share for free.
So, if you originally held 1 share of Bajaj Finance, here's what you now have:
1 share split into 2 (stock split)
2 shares → 2 bonus shares (1 bonus per share)
Total = 4 shares
Important Dates to Know
Record Date: June 14, 2025
Ex-Date: June 17, 2025
Stock Split Ratio: 1:1 (₹2 face value → ₹1)
Bonus Ratio: 1:1 (1 bonus share for every 1 share post-split)
Effective Date: June 17, 2025 (price adjustment visible on exchanges)
The record date determines who is eligible to receive the split and bonus shares. If you held the shares on June 14, you’re eligible.
What Does This Mean for Investors?
No loss in value: Your total investment remains the same; only the price and number of shares have changed.
Higher liquidity: With a lower stock price, more retail investors may find it easier to buy into Bajaj Finance.
Confidence signal: Such corporate actions usually reflect management confidence in the company’s future growth.
The dramatic 90% drop in Bajaj Finance’s stock price is not a cause for panic. In fact, it's a result of shareholder-friendly corporate actions aimed at enhancing market participation.
With Bajaj Finance being a strong performer in the NBFC sector, investors should view this move as a structural change—not a loss in value.
Always remember: More shares ≠ More wealth, unless the company continues to grow. So, stay invested smartly and monitor fundamentals, not just price charts.
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