Bajaj Finance surges on bonus issue/stock split

The shares of Bajaj Finance on July 11 have surged over 5 per cent. The Board of the company has informed the exchanges that the company which had earlier intended to meet to consider the May – June quarter results will also discuss the prospective of a bonus issue or a stock split. If any one of the above proposal is approved by the board on the day, it will then be subjected to the shareholders' nod.

The shares of the company as at 11.59 am are trading at Rs 8660 and have gained by 5.75 per cent. The shares in the last 5 days have given a return of 5 percent. But the interesting part is that in the last 1 year the shares have given a return of 70 percent, when the major stocks were negative.

Stock spilt generally reduces the shares prices, so that it becomes affordable to the retail investors; on the other hand it also stabilises the share prices which remain in a particular range when the management looks for a buy back. However, the stock splits do not increase the economic value, but they increase the shareholder base.

The shares' 52-week High/ Low stand at Rs 8698.60/4678. In Q4FY16, the company has posted a robust profit. The company’s top line has increased by 35 per cent as compared to Q4FY15 and the bottom line has expanded by 36 per cent.