Bajaj Finance drops 4% on concerns over Covid-related provisions

NEW DELHI: Shares of Bajaj Finance dropped nearly 4 per cent in Wednesday's trade after the NBFC said it will continue to accelerate its provisioning for Covid-19 for the second quarter as well to further strengthen the balance sheet.

The company had registered a three-fold rise in provisions, leading to a nearly 30 per cent fall in profits before tax in the June quarter. It had made additional provisioning of Rs 1,450 crore in Q1, taking the contingent credit loss provision due to Covid to Rs 2,350 crore in the June quarter.

Following the development, the stock fell 3.57 per cent to hit a low of Rs 3,350.10.


Bajaj Finance saw tepid loan growth, as new loans booked during the quarter halved to 36 lakh from 65 lakh a year-ago.

The NBFC said its consolidated deposit book rose by 22.5 per cent to Rs 21,600 crore as of September 30. Customer franchise as on September 30 stood at 4.41 crore compared with 3.87 crore a year ago.

Deposit book stood at approximately Rs 21,600 crore as on September 30, 2020, compared with Rs 17,633 crore a year ago, the company said. The assets under management (AUM) in the quarter under review rose to Rs 1,37,300 crore from Rs 1,35,533 crore, Bajaj Finance said.

"The company continues to remain well capitalised with a capital adequacy ratio (CRAR) of approximately 26.5 per cent while maintaining the highest ever liquidity buffer. Consolidated liquidity surplus stood at approximately Rs 22,300 crore as of 30 September 2020, and the liquidity position remains very strong," the Pune headquartered non-banking finance company said.