RBI ban lifted! Bajaj Finance shares hit Rs 7,400 level, m-cap tops Rs 4.5 lakh crore

Shares of Bajaj Finance Ltd climbed nearly 8 per cent in Friday's trade, with its market capitalisation moving past the Rs 4.5 lakh crore mark after the Reserve Bank of India (RBI) lifted ban on two of its lending products. The bans on eCOM and online digital ‘Insta EMI Card’ were in place since November 2023.

This has now been lifted, Bajaj Finance said adding it would now resume sanction and disbursal of loans in the two business segments including issuance of EMI cards.

Following the development, the stock surged 7.54 per cent to hit a high of 7,400 on BSE. The NBFC added Rs 32,000 crore in market capitalisation (m-cap) intraday. It was later commanding a market value of Rs 4,51,932.31 crore. Bajaj Finance hit a 52-week high of Rs 8,190 on October 6, 2023.

"We wish to inform that the RBI, vide its letter dated 2 May 2024, based on the remedial actions taken by the Company, has conveyed its decision of lifting the said restrictions on eCOM and online digital ‘Insta EMI Card’, with immediate effect. The company would now resume sanction and disbursal of loans in the above two business segments including issuance of EMI cards," Bajaj Finance said.

Analysts were expecting the regulatory ban on two of Bajaj Finance products to be lifted soon after the NBFC made required changes in response to the regulatory restriction and formally requested the RBI for review and removal of the restrictions.

The NBFC had on November 15, 2023 informed stock exchanges about the RBI restriction on the sanction and disbursal of new loans under “eCOM” and online/digitally on ‘Insta EMI Card’.

Bajaj Finance said it remains committed to ensure adherence and compliance of regulatory guidelines.

Nomura India noted that Bajaj Finance's PBT was impacted by 4 per cent in Q4 due to regulatory action on its two products 'eCOM' and 'lnsta EMI Card'.

Bajaj Finance has guided for 26-28 per cent AUM growth in FY25. This is against 25-27 per cent long-term guidance. Nomura howver expects RoE (21-23 per cent) and PAT (23-24 per cent) growth to be lower than the guidance.

This, it said, would be driven by pressure on NIMs (down 30-40 bps during 4Q24 -2Q25) due to its pivot towards secured asset and rising cost of funds; and elevated credit cost of 1.75-1.85 per cent against 1.6 per cent in FY24.