Bajaj Finance joins Rs 4 trillion m-cap club as stock hits record high

At 10:51 am, with its Rs 4.001-trillion market cap, Bajaj Finance stood in 8th place in overall market cap ranking of companies

Non-banking finance company (NBFC) Bajaj Finance hit Rs 4-trillion in market capitalisation (market cap) after its shares touched a record high of Rs 6,640.80, up 3.6 per cent on the BSE in intra-day trade on Wednesday. The stock surpassed its previous high of Rs 6,475 touched on August 4, 2021.

At 10:51 am, with its Rs 4.001 trillion market cap, Bajaj Finance currently stands in eighth place in the overall market cap ranking of companies, according to the data from Bombay Stock Exchange (BSE).

Bajaj Finance is now the fourth financial firm having a market cap of over Rs 4 trillion. HDFC Bank is on the top of the list, with Rs 8.50 trillion market cap, followed by Housing Development Finance Corporation (HDFC) (Rs 4.96 trillion) and ICICI Bank (Rs 4.84 trillion), data shows.

Bajaj Finance focuses on six broad categories -- consumer lending, SME lending, commercial lending, rural lending, deposits; and partnerships and services.

In the past one week, the stock of Bajaj Finance has outperformed the market by gaining 8 per cent on hopes that B2B and auto finance businesses will do much better with the reopening of the economy. In comparison, the S&P BSE Sensex was up 2.8 per cent during the same period.

B2B and auto finance businesses were most affected due to strict lockdowns in the majority of states. These businesses delivered 70 per cent of their planned volumes in April 2021 as multiple states started imposing lockdowns from the middle of that month, Bajaj Finance had said in a mid-quarter update on June 4. The company further said it has taken several actions to reduce its operating expenses and cost of funds to partially mitigate the financial impact caused by lower AUM growth.

“The severity of the Covid second wave impact on earnings has been much lower versus the first wave. The management is well-prepared to deal with this and compensate for lost business with the start of the unlocking process. Digital initiatives have been upfronted and are likely to provide significant benefits on the cost and growth fronts. The cross-selling of products to the existing Credit segment customer base of around 39 million would be a key growth driver in FY22 as well,” analysts at Motilal Oswal Securities said, commenting on Bajaj Finance’s annual report update.