Share price of this large-cap Non Banking Financial Company (NBFC) stock moved up by 7.5 percent on BSE to hit an intraday high at Rs. 7,400 in the morning trading session of Friday after the Reserve Bank of India (RBI) removed restrictions on the company’s eCOM and online digital ‘Insta EMI Card’.
With a market capitalisation of Rs. 4,43 lakh crore, at 11:23 a.m. the shares of Bajaj Finance Limited were trading in the green at Rs. 7,091.05, up by 3.05 percent.
According to the latest regulatory filings in the stock exchanges, based on the remedial actions taken by Bajaj Finance Limited, the RBI has announced its decision to lift the restrictions on ‘eCOM’ and online digital ‘Insta EMI Card’, with immediate effect.
The RBI directed the company on November 15, 2023, to immediately stop the sanction and disbursement of new loans under its two lending products, ‘eCOM’ and ‘Instant EMI Card’.
The company was accused of failing to comply with the existing provisions of the RBI’s guidelines for digital lending, specifically the failure to non-issuance of Key Fact Statements (KFS) to borrowers under these two lending products and the deficiencies in the KFS issued for other digital loans sanctioned by the company.
The supervisory restrictions were said to remain in effect until the deficiencies observed are made good by the company to the satisfaction of RBI, in terms of the issuance of KFS to the borrowers.
Further, the company had temporarily suspended the issuance of Existing Member Identification (EMI) cards to new customers until the RBI’s observations of deficiencies were fixed to their satisfaction. In the normal course of business, the company continued to offer financing to new and existing customers at dealer stores.
However, the company will now resume sanction and disbursal of loans in the aforementioned two business segments, including the issuance of EMI cards, as per the latest filings.
In terms of financials, the company’s revenue from operations grew by 31.3 percent from Rs. 11,364 crore in Q4 FY22-23 to Rs. 14,926 crore in Q4 FY23-24, accompanied by a rise in net profit of 21.12 percent from Rs. 3,158 crore in Q4 FY22-23 to Rs. 3,825 crore in Q4 FY23-24.
As of March 2024, the Government of Singapore holds nearly 2.11 crore equity shares, representing a 3.41 percent stake in the company.
The stock has delivered positive returns of nearly 14.6 percent in the last one year. However, it has given negative returns of around 4.5 percent in the last six months and about 2.9 percent, so far in 2024.
Bajaj Finance Limited is one of the leading and most diversified financial services companies in India and is primarily engaged in the business of lending.
The company has a diversified lending portfolio across retail, SME and commercial customers with a significant presence in urban and rural India. It also accepts public and corporate deposits and offers its customers a wide range of financial services products.
Written by Shivani Singh
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