On April 29, 2025, Bajaj Finance Limited, one of India’s premier non-banking financial companies (NBFCs), set the stock market abuzz with a trio of shareholder-friendly announcements: a special interim dividend of ₹12 per share, a 1:2 stock split, and a 4:1 bonus issue. These moves, coupled with a proposed final dividend of ₹44 per share, have positioned Bajaj Finance as a standout performer in the financial sector. With a record-breaking total dividend of ₹56 per share and strategic corporate actions, the company is not only rewarding its investors but also enhancing its market accessibility. This blog post unravels the magic behind these announcements, their implications for shareholders, and the trends shaping Bajaj Finance’s trajectory in 2025.
The Dividend Delight: ₹56 Per Share
Bajaj Finance’s board announced a special interim dividend of ₹12 per share on equity shares with a face value of ₹2, equating to a 600% payout for the financial year ending March 31, 2025. The company stated, “The Board of Directors has declared a Special (Interim) Dividend on equity shares at the rate of Rs. 12 per share (600%) of face value of Rs. 2 each for the financial year ended 31 March 2025.” This dividend, stemming from a one-time gain from the sale of a stake in its subsidiary, Bajaj Housing Finance, during its September 2024 IPO, will be dispatched by May 9, 2025.
In addition, the board recommended a final dividend of ₹44 per share, bringing the total dividend for FY25 to ₹56 per share, a significant jump from ₹36 the previous year. The final dividend, pending approval at the 38th Annual General Meeting on July 24, 2025, has a record date of May 30, 2025, with payments expected by July 28, 2025. This generous payout underscores Bajaj Finance’s robust cash flows and profitability, making it a favorite among income-seeking investors. For an investor holding 100 shares, the total dividend translates to ₹5,600, offering immediate returns and reinforcing confidence in the company’s financial health.
The Stock Split: Making Shares Accessible
The company also announced a 1:2 stock split, or a sub-division of one equity share with a face value of ₹2 into two shares with a face value of ₹1 each. As per the exchange filing, “Sub-division of 1 (one) equity share of face value of ₹2 each fully paid-up into 2 (two) equity shares of face value of Re. 1 each fully paid-up.” This action, subject to shareholder approval, is slated for completion by June 27, 2025.
A stock split doubles the number of shares while halving the per-share price, making the stock more affordable for retail investors. For instance, an investor holding 100 shares at ₹9,105 (the closing price on April 29, 2025) would hold 200 shares post-split at approximately ₹4,552.50 each, assuming no market-driven price changes. This move enhances liquidity and broadens the shareholder base, as lower share prices attract smaller investors. Bajaj Finance’s previous stock split in 2016, which reduced the face value from ₹10 to ₹2, proved successful in boosting retail participation, and this latest split continues that strategy.
The Bonus Issue: A Reward for Loyalty
Complementing the stock split, Bajaj Finance declared a 4:1 bonus issue, meaning shareholders will receive four additional shares for every share held as of the record date, June 27, 2025. Issued from the company’s reserves, these bonus shares will carry a face value of ₹1 each post-split. For an investor with 100 shares pre-split, the sequence of actions would yield 200 shares post-split, and after the bonus issue, a total of 1,000 shares (200 × 5).
Bonus issues reward shareholders without requiring additional investment, signaling confidence in future earnings. Social media platforms like X have been abuzz with excitement, with users noting that “1 share will become 10” after the split and bonus, highlighting the dramatic increase in share count. However, the share price will adjust proportionally, maintaining the stock’s intrinsic value unless driven by market sentiment or fundamentals.
Financial Performance: The Foundation of Confidence
These shareholder-centric moves are backed by Bajaj Finance’s stellar financial performance in Q4 FY25 (January–March 2025). The company reported a consolidated net profit of ₹4,614 crore, a 20% increase from ₹3,824.53 crore in Q4 FY24, surpassing analyst estimates of ₹4,518 crore. Net interest income rose 22% to ₹9,807 crore, driven by a 26% year-on-year growth in assets under management (AUM) to ₹416,661 crore. New loan bookings surged 36% to 10.10 million, and the customer franchise grew 22% to 101.82 million.
Asset quality remained strong, with gross non-performing assets (NPAs) at 1.18% and net NPAs at 0.56% as of March 31, 2025, compared to 1.05% and 0.46% a year earlier. The deposit book expanded by 19% to ₹71,400 crore, bolstering the company’s funding base. These metrics reflect Bajaj Finance’s operational efficiency and ability to tap into India’s growing credit demand, particularly in retail, SME, and rural lending segments.
Market Reaction and Investor Sentiment
The announcements sparked significant market activity. Bajaj Finance shares hit a 52-week high of ₹9,660 on April 24, 2025, before closing at ₹9,105 on April 29, delivering a 35% year-to-date gain in 2025. Over five years, the stock has soared 329%, adding over ₹1.5 lakh crore to investor wealth this year alone. Brokerages are optimistic, with Elara Capital setting a target price of ₹11,161 and Ventura Securities initiating coverage at ₹10,205, citing a 25% AUM CAGR over FY24–27.
On X, investors have hailed the announcements as a “shareholder bonanza,” with discussions focusing on the transformative impact of the dividend, split, and bonus. Some users emphasized the potential for increased liquidity to stabilize prices during market dips, while others cautioned that the adjusted share price will reflect these actions, urging focus on fundamentals like AUM growth and asset quality.
Implications for Investors
For existing shareholders, the ₹56 dividend, stock split, and bonus issue significantly enhance portfolio value. The dividend offers immediate cash returns, while the split and bonus increase shareholding, potentially benefiting from future price appreciation. For example, an investor with 100 shares pre-split would receive ₹5,600 in dividends and hold 1,000 shares post-split and bonus, amplifying their stake.
New investors should approach cautiously due to the stock’s high valuation, trading at 6.48 times its book value and a P/E ratio of 26.40. The one-year beta of 1.1 indicates moderate volatility, requiring careful market timing. However, the stock split and bonus issue will make shares more accessible, potentially driving higher trading volumes. Bajaj Finance’s diversified portfolio, strong AUM growth, and rural expansion make it a compelling long-term investment.
Broader Market Trends
Bajaj Finance’s actions align with trends in India’s NBFC sector, where companies are capitalizing on economic recovery and digitalization. The Reserve Bank of India’s anticipated rate cuts in 2025 could further fuel credit demand, benefiting established players like Bajaj Finance. The company’s focus on digital product finance and rural markets positions it to capture growing demand in underserved segments.
Looking Ahead
Bajaj Finance’s April 29, 2025, announcements mark a defining moment, blending immediate rewards with strategic positioning. The ₹56 dividend, 1:2 stock split, and 4:1 bonus issue, backed by strong Q4 FY25 results, reinforce its blue-chip status. As the company completes these actions by June 27, 2025, and navigates a dynamic financial landscape, its focus on innovation and customer acquisition will drive sustained growth.
Investors should monitor the stock’s performance post-split and bonus, as well as the final dividend payout post-AGM. While the announcements have fueled optimism, consulting certified financial advisors is essential for tailored decisions. Bajaj Finance’s shareholder bonanza is a testament to its financial strength and commitment to creating lasting value in 2025 and beyond.
