Bajaj Finance MD exit triggers IndusInd Bank buzz; Jefferies shares views, target price

Bajaj Finance Ltd is in focus on Tuesday after Anup Kumar Saha tendered his resignation as the Managing Director and a Director at the NBFC, citing personal reasons. Calling it a surprising departure, Jefferies noted that Saha was appointed as MD of Bajaj Finance in April only, adding that his name emerged as a candidate for IndusInd Bank CEO.

The foreign brokerage said Bajaj Finance continues to be among its top NBFC picks. "Thankfully, its long-standing former MD (Rajeev Jain) is there as Executive VC & will now be VC & MD till Mar-28. This & its seasoned top management team can make transition smooth, but succession will be a medium term deliverable. Rajeev may pull back on an advisory role for Bajaj Finserv," Jefferies said.

The brokerage said a few reports mentioned that Saha is amongst the three candidates that IndusInd Bank may have proposed for new CEO, for which bank had to submit recommendations by June 2025.

"Even as the events count as slight negative, we feel that franchise is on a good footing that can benefit from lower rates, improving asset quality and uptick in credit demand. We see +20 per cent CAGR in profit over FY25-28 and ROE of 19 per cent in FY26. We look forward to more updates on 24-July when company reports 1QFY26 results. Retain BUY call with price target of Rs1,044 based on 4.9x Jun-27 PB," Jefferies said.

On Rajeev Jain, Jefferies said he has been the architect of success at Bajaj Finance and was CEO for over 15 years (aged around 54 years). He was recently elevated to the role of Executive Vice Chairman, but will now take back the role as MD, hence get designated as Executive VC & MD till his term that ends in March 2028.

"In case of NBFCs, the appointment of CEO/ MD is decided by board/ NRC and unlike banks they don't need to take specific approvals from RBI. Given his stature and relationships with stakeholders, we expect this transition to be smooth from near-term and focus will continue to stay on growth, asset quality and profitability. Rajeev may need to pull back from any advisory contribution to Bajaj Finserv," Jefferies said.

Jefferies said Jain's availability as well as depth of management team will allow smooth transition in near-term, for the medium term Bajaj Fiance may need to find/ groom talent to take up role as CEO/ MD.

"We note that this will be Rajeev's 4th term (16yrs) and while the norms around banks (limiting term to 15 years for non promoter CEO) don't apply to NBFCs, the group may look at finding suitable succession options," Jefferies said.