Bajaj Finance stock regains speed after fall in the morning

• The Bajaj Finance stock fell by over 1% in early morning trade on Thursday.
• Bajaj Finance has temporarily suspended sanction and disbursal of new loans under eCOM; and Insta EMI Card.
• The banking regulator has said these supervisory restrictions will be reviewed upon the rectification.

The stock of Bajaj Finance has volatile a day after the Reserve Bank of India (RBI) directed it to stop sanction and disbursal of loans under two of its products. It fell by over a percent in early morning trade on Thursday. But it rose fast from its lows, and is now 0.9% higher at 1 pm, at ₹7,293.

On Wednesday evening, the Reserve Bank of India (RBI) directed the non-banking finance company to stop sanction and disbursal of loans under two of its products.

The company responded to it, and said that it is taking actions after the RBI directive. It’s also temporarily suspending sanction and disbursal of new loans under eCOM; and online/digitally on Insta EMI Card.

As per RBI, India’s banking regulator, the action is necessitated due to non-adherence of the company to the extant provisions of digital lending guidelines set by it. The main contention is about the non-issuance of Key Fact Statements to the borrowers under these two lending products and the deficiencies in the Key Fact Statements issued in respect of other digital loans sanctioned by the company.

“Based on the supervisory concerns raised by the RBI, we will undertake a detailed review of the KFS and implement requisite corrective actions to the satisfaction of the RBI at the earliest. We reaffirm our commitment to rectify observations of the RBI in Key Fact Statement and comply with RBI Directions at the earliest, and will continue with our endeavor to provide seamless financial services to our customers,” the company said in a statement.

The regulator also added that these supervisory restrictions will be reviewed upon the rectification of the said deficiencies to its satisfaction.

Bajaj Finance is a non-banking financial company, with a customer base of 76.5 million. It has ₹2.9 lakh crore in assets under management (AUM) as of September 30, 2023. Its deposit book stood at ₹54,821 crore in the same period.

It has raised ₹8,800 crore via qualified institutional placement (QIP) earlier this month.

$BAJFINANCE.NSE The weekly chart of $BAJFINANCE.NSE depicts a multi-month consolidation range, with prices now pressing against a major overhead resistance zone (Rs. 8,000). The series of higher lows off the '23 low (Apr) is a positive sign. The stock is a buy on a breakout above resistance at Rs. 8,000 with the next upside targets at Rs. 9,700 (6 months) and 12,400 (12-24 months)!

— (@ramaiyavipul) November 16, 2023