Bajaj Finance Ltd., one of India's leading non-banking financial companies (NBFCs), made headlines on April 24, 2025, after it announced a board meeting scheduled for April 29 to consider key proposals that could significantly benefit its shareholders. The company plans to evaluate a special interim dividend, a stock split, and a bonus share issue — all of which have historically boosted investor sentiment and enhanced share liquidity.

Initial Market Reaction and Intraday Movement

Following this announcement, Bajaj Finance shares opened 4% higher on Thursday, sparking optimism across investor circles. The stock rose sharply in early trade, reacting positively to the company’s announcement of potential shareholder rewards. However, as the day progressed, the stock witnessed some profit booking, bringing it closer to the day’s low of ₹9,275.05, after touching intraday highs.

By late afternoon, the stock was trading 0.34% lower at ₹9,295, signalling a short-term pause in the rally as traders booked profits after the early gains.

What’s on the Agenda for April 29?

As per the regulatory filing, Bajaj Finance will consider three major corporate actions during its upcoming board meeting:

• Stock Split: The company plans to split its equity shares of ₹2 face value, which will make its shares more affordable and liquid in the secondary market.

• Bonus Share Issue: A proposal to issue bonus shares to existing shareholders is also on the table, which would increase the total outstanding shares without changing the company’s market capitalization.

• Special Interim Dividend: The board will consider announcing a special interim dividend for the financial year 2024-25, offering direct cash rewards to shareholders.

These decisions, if approved, will reinforce Bajaj Finance’s commitment to sharing profits and value creation with its investors.

Understanding a Stock Split and Bonus Share

A stock split involves dividing the existing shares of a company into multiple shares, reducing the price per share but not altering the company's total market value. For example, if one share priced at ₹10,000 is split 5:1, it becomes five shares priced at ₹2,000 each. The primary benefit of this move is to enhance trading liquidity and make shares more accessible to retail investors.

On the other hand, bonus shares are issued to existing shareholders free of cost, typically from the company's accumulated earnings. This not only increases the number of outstanding shares but also boosts investor morale, as it's a strong signal of company confidence.

Bajaj Finance’s Rewarding Track Record

This is not the first time Bajaj Finance is looking to reward its shareholders. In 2016, the company announced:

• A 1:1 bonus issue, giving one bonus share for every one share held.

• A stock split, changing the face value of equity shares from ₹10 to ₹2.

Additionally, Bajaj Finance has declared 23 dividends since July 10, 2003. In just the last 12 months, shareholders received an equity dividend of ₹36 per share, highlighting the company’s robust profit-sharing policy.

What it Means for Investors

The announcement indicates Bajaj Finance’s strong financial health and its intent to drive shareholder value. These corporate actions often result in increased investor participation, higher trading volumes, and in many cases, a rise in stock price due to increased accessibility and market confidence.

However, the recent dip in intraday price also indicates that investors are cautiously optimistic, preferring to wait until the board meeting outcome is officially declared on April 29.

What to Expect on April 29

Should the proposals be approved, Bajaj Finance would need to disclose:

• The record date for entitlement to bonus shares and stock split.

• The ex-date when shares will trade without the value of the dividend or split.

• The dividend payout details, including amount and distribution timeline.

How Shareholders Can Benefit

For shareholders, the potential upside includes:

• Increased number of shares, either via bonus or split, leading to more flexibility in trading.

• Liquidity improvement, as lower share prices post-split may lead to increased buying interest.

• Direct cash rewards via the interim dividend, adding to investor returns.

Final Thoughts

With this strategic move, Bajaj Finance continues to strengthen investor confidence, cementing its image as a shareholder-friendly NBFC. The April 29 board meeting is now eagerly awaited by the market, as it could trigger another rally in the stock, depending on the announcements made.

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