Today, If you’ve been watching your Stocks portfolio lately and noticed that Bajaj Finance share price seems to have taken a dramatic plunge, take a deep breath.No need to worry!!
Your investment hasn’t vanished into thin air, and no, the company hasn’t suddenly make a loss of 90% of its value overnight. What you’re witnessing is the effect of corporate actions of the Bajaj finance (NSE:BAJFINANCE) – specifically, a stock split and bonus issue that many investors find confusing at first glance due to two actions at a time.
The “Crash” wasn’t Really a Crash, It’s just a corporate actions.
Let’s have a case study : You own 100 shares of Bajaj Finance, and one day you wake up to see the share price has dropped from approx. ₹9,000 per share to what appears to be a fraction of that amount that is around 900, Your heart might skip a beat, right!! but here’s the truth – you haven’t lost any money. In fact, you might have gained something valuable by investing in the stock.
What happened is that Bajaj Finance one month ago announced a bonus issue of shares in the ratio of 4:1 and a stock split in the ratio of 1:2. This corporate action fundamentally changes how the stock trades, but not the underlying value of your investment get ruined.
Think of it like exchanging a ₹100 note for five ₹20 notes. You still have the same value, just in a different form. That’s exactly what happens when companies announce stock splits and bonus issues.
Breaking Down Bajaj Finance’s Corporate Action Bonanza
Bajaj Finance announced a 1:2 stock split, a 4:1 bonus share, a Rs. 12 special dividend, and a Rs. 44 final dividend.
Let’s decode what each of these means for someone who owns Bajaj Finance shares:
The 1:2 Stock Split Explained
When Bajaj Finance announced a 1:2 stock split, it means that for every single share you owned would become two shares. The stock split reduced the face value of the stock from ₹2 to ₹1, effectively doubling the number of shares held by investors.
If you owned 100 shares at ₹9,000 each before the split, you now own 200 shares at approximately ₹4,500 each. Your total investment value remains the same – ₹9,00,000 – but you now have more quantity of shares at a lower price per share.
The Generous 4:1 Bonus Issue
The bonus issue is where things get really interesting for shareholders. A 4:1 bonus issue was declared, granting four bonus shares for every one share held with the investor.
This means if you held 100 shares originally, you received an additional 400 bonus shares absolutely free as per corporate actions. After the stock split, those 100 shares became 200, and with the bonus, you received 800 more shares. So presently you have total holding jumped from 100 shares to 1,000 shares!
The Sweet Cherry on Top: Dividends
As if the stock split and bonus weren’t enough, Bajaj Finance also declared substantial dividends. Shareholders of Bajaj finance (NSE: BAJFINANCE) will receive a special dividend of ₹12 per share and a final dividend of ₹44 per share, total ₹56 per share in dividends will be given to the shareholders.
Why Companies Choose Stock Splits and Bonus Issues
You now wonder why Bajaj Finance or any other company would go through this seemingly complex process. The reasons are rooted in making their shares more accessible and rewarding to the loyal shareholders.
Making Shares More Affordable
When Bajaj Finance share price was trading at over ₹9,000 per share, it created a psychological barrier for many retail investors due to very high price. Not everyone has ₹9,000 to buy a single share, especially new investors or those with smaller portfolios to buy even a single stock. By splitting the stock, the company makes it easier for more people to invest in the stocks.
Let’s have a case study: Imagine you are a college student with only ₹5,000 to invest. At ₹9,000 per share, Bajaj Finance was out of reach and expensive for you. But at ₹4,500 post-split, you could afford to buy at least one share of Bajaj finance and participate in the company’s growth story.
Improving Liquidity
More affordable shares typically mean more trading activity on day to day basis. When shares are priced lower, more investors can participate, leading to better liquidity in the stock and volume. This benefits every participants of the Market– buyers find it easier to purchase, and sellers can exit their positions more readily due to high volumes.
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Rewarding Faithful Shareholders
The bonus issue is a corporate actions for companies to thank their loyal shareholders. Instead of big cash dividends, they give more shares. This way, you own more of the company without spending more money by purchasing the shares.
Understanding Ex-Bonus and Ex-Split Trading
When a stock trades “ex-bonus” or “ex-split,” it basically happen after the bonus or split has been announced. Buying the stock after this date means you miss out the bonus or split shares.
Read this: Top 10 best Investment Options for Financial Success in India
The Global Market Context
Corporate actions like stock splits and bonus issues happen worldwide. They’re not just for Bajaj Finance or Indian stock markets. Global market trends affect how the investors see and react to these corporate actions.
In international markets, stock splits are very common. Companies like Apple, Tesla, and Amazon have split their stocks to keep their stock prices very low to make it affordable to the retail investors. The basic goal of these corporate actions is to make shares more affordable without changing the total asset value for shareholders.
Real Impact on Your Portfolio
Let’s have a look at how these actions affect your portfolio:
Before Corporate Actions:
You owned: 100 shares at ₹9,000 each:
Total stocks value: ₹9,00,000
After 1:2 Stock Split:
You own: 200 shares at ₹4,500 each
Total value: ₹9,00,000 (same as before)
After 4:1 Bonus Issue:
You own: 1,000 shares (200 original + 800 bonus)
If trading at ₹900 each (adjusted for both actions)
Total value: ₹9,00,000
Plus Dividends:
₹56 per original share × 100 shares = ₹5,600 in stocks dividend.
These actions increase your ownership in the company. The stock split makes shares more accessible to others.
What this action means for Bajaj Finance
Bajaj Finance has a five-year plan called “BAF 3.0” for 2025-29. This shows the company’s confidence in its growth and wants to reward it’s shareholders.
Corporate actions show management’s faith in the business and success of the business in long run. Giving bonus shares means they expect strong future earnings in the company. This ensures good returns even with more quantity of shares.
For Bajaj Finserv Share Holders Too
Bajaj Finserv, the parent company of Bajaj Finance has also taken similar steps. They’ve split their stock and given bonus shares. This shows a consistent growth approach to rewarding shareholders across the Bajaj group companies.
The Emotional Roller Coaster for Investors
Seeing your share price drop can be very scary, even if you know what’s happening in the back-end. It’s normal to feel panic before understanding.
Many investors have felt a mix of both emotions. They wake up to “losses” in their portfolio, only to find they own more shares. This emotional journey is part of learning to invest in stock market and this is a part of the game.
Practical Tips for Shareholders
Don’t get Panic: If your share price drops, check your demat account for extra shares as soon as possible or wait for the stocks to be credited.
Understand Record Dates: Hold shares before the record date into your DEMAT account to get bonuses and splits.
Consider the Long-term aspects in mind: These corporate actions are typically positive signals about management’s confidence in the future of the company.
The Bigger Picture for Bajaj Finance
Bajaj Finance is a giant in India’s non-banking financial sector. It has a market cap of ₹5,79,855 crore and revenue of ₹69,684 crore as of June 2025. The recent moves make the stock more appealing to the retail and institutional investors and reward current ones.
The company’s solid base and great marketing structure and these shareholder-friendly steps set it up for growth.
For those who get stock splits and bonus issues, including dividends, these actions are chances, not worries.
Conclusion: Embracing the New Normal
Next time you see Any stocks shares seem to drop very suddenly, remember and just check is there any corporate actions such Stock splits and bonus issues going on. These are ways for companies to thank their shareholders and make stocks easier to buy for the retail investors basically. They’re not signs of trouble.
It’s key for any stock investor to grasp these corporate actions. They’re part of growing wealth, not losing anything. You’ve got more shares in a company without spending more.
Focus on the total value of your shares, not just the price. Investing can be sometimes look like a loss but is actually a gain. Bajaj Finance’s recent moves shows this event very clearly.
As markets changes and Indian companies become more investor-friendly, expecting more of these actions soon in other companies as well.
Knowing about them can lead to smarter investment choices and help you see the real value of the stocks in your portfolio.
I hope now you understand the real game in very easy manner, thanks for reading!
Disclaimer: This communication and content is for informational and educational purposes only. It is not intended as investment advice for the purchase or sale of any financial or other instrument.
This was very clear and easy to follow. Looking forward to more.