Bajaj Finance crashes 90%—Here's the real reason behind the drop
What's the story
Bajaj Finance's shares witnessed a massive drop of nearly 90% today, opening at ₹937 per share compared to the previous close of ₹9,331 apiece.
This steep decline reflects corporate adjustments: a 4:1 bonus issue and a 1:2 stock split, expanding each share's count while reducing its individual market price.
Though investor dashboards displayed a sharp drop, market cap and investor wealth remained unaffected.
Corporate actions
How corporate adjustments change your Bajaj Finance shareholding
A Bajaj Finance shareholder holding 10 shares as of the record date, June 16, will receive 40 additional shares under the 4:1 bonus issue, taking their total to 50 shares.
Investors who purchased shares on or after June 16 will not be eligible for this bonus.
Following the bonus, the stock will undergo a 1:2 split, doubling the shareholder's 50 shares to 100.
Thus, someone with 10 shares before the record date will hold 100 shares after both corporate actions.
Price adjustment
Why share price is adjusting today
The price of a stock is adjusted after a bonus issue or stock split because the number of shares increases while the company's overall value (market capitalization) remains unchanged.
In this case, Bajaj Finance's share price has been adjusted to reflect the new number of shares in circulation post the bonus issue and stock split.
This is why we are seeing such a significant drop in share price today.