Rahul Bajaj will step down as the chairman of Bajaj Finance on July 31, 2020, the company said in a filing to Bombay Stock Exchange on Tuesday. He will be replaced by son Sanjiv Bajaj, who is currently the vice-chairman of the company, from August 1. Sanjiv is also the Chairman and Managing Director of Bajaj Finserv, and the Chairman of Bajaj Allianz.
Rahul Bajaj, however, will continue to serve the company as a non-executive non-independent director, Bajaj Finance said in the filing.
"Rahul Bajaj, non-executive chairman of the company, having been at the helm of the company since its inception in 1987 and the group for over five decades, as part of succession planning, has decided to demit the office as Chairman of the Board with effective from close of business hours on 31 July 2020," Bajaj Finance said.
The board of directors, at its meeting held today, has approved the appointment of Sanjiv Bajaj, currently the Vice Chairman of the Company, as Non-Executive Chairman of the Company with effect from 1 August 2020, in place of Rahul Bajaj, the company informed the exchange.
Reacting to the news, shares of Bajaj Finance declined as much as 6.43 per cent to touch an intraday low of Rs 3,220 on the BSE. The stock was already trading in negative terrain-following its June quarter results announced earlier today.
Bajaj Finance shares opened higher at Rs 3,498 against the previous closing price of Rs 3,441.35 and touched a day's high of Rs 3,517.75 before the earnings announcement. On the volume front, as much as 10.18 lakh shares changed hands over the counter as compared to the two-week average volume of 6.69 lakh shares.
For the April-June quarter, Bajaj Finance has reported 19.4 per cent decline in consolidated net profit at Rs 962.32 crore compared to Rs 1,195.25 crore in the year-ago period, due to contingency provision of Rs 1,450 crore for COVID-19 pandemic. The Pune-based company's net interest income rose 12 per cent to Rs 4,152 crore in Q1 FY21 from Rs 3,694 crore in Q1 FY20.
During the June quarter, the company made an additional contingency provision of Rs 1,450 crore, taking the overall contingency provision for COVID-19 to Rs 2,350 crore as of June 30. The contingency provision for COVID-19 is now at 10.8 per cent of the company's consolidated moratorium book, the company informed the stock exchanges.
By Chitranjan Kumar