Bajaj Finserv Shares Drop 2% on March 18 – Here’s Why

Bajaj Finserv Share Price: As of Tuesday midday, Bajaj Finserv's shares were trading at 1,836.15, a drop of 2 pecent. The decline comes with Blumont and Profurl's profit taking following the announcement of the purchase of Allianz's 26 percent stake within the joint venture for 24,180 crore rupees. The stock has decreased 4 pecent from the peak intraday price of 1905. The stock had underperformed the market as compared to Bajaj Finserv. The BSE Sensex at 10:13 AM had reflected an increase of 1 pecent, or 753 points, 74,922.

The stock has had a decline of 4 ans increased previously for  4 pecent on Monday. Bajaj Finserv has been a clear outperformer for the market compared to the indices – The stock has increased by 17 pecent over the year as compared to the benchmark index which has decreased by 4.5 percent.

The company announced on Monday that they obtained a share purchase agreement for acquiring German based Allianz SE. The Allianz stake is subdivided into 2 joint venture arms - Bajaj Allianz General Insurance Company (BAGIC) and Bajaj Allianz Life insurance company (BALIC) with the aggregate value of 24,180 crore rupees.

Following the acquisition, Bajaj Group will increase its stake in both insurance firms to 100 per cent, up from 74 per cent. Bajaj Group is to purchase the 26 per cent stake in BALIC at Rs 10,400 crore and in BAGIC at Rs 13,780 crore.

Bajaj Finserv will have 75.01 per cent of the stake while Bajaj Holdings and Jamnalal Sons will possess 19.95 per cent and 5.04 percent respectively. This dissolution of their Joint Venture allows both groups to independently strategize. These joint venture agreements lasting 24 years between the Bajaj Group and Allianz SE for insurance businesses shall cease to exist upon executing the initial portion of the transaction of at least 6.1 per cent and changing the status of the Promoter to Investor in Allianz.

With complete ownership of both the companies, the management of Bajaj Finserv is positive the acquisition will create significant stakeholder value in the coming years.

ICICI Securities stated the deal consolidates Bajaj Finserv’s control, improves strategic agility,while also increasing spending in an expanding insurance market in the long term.

The parent company Bajaj Finserv, along with its subsidiaries, joint ventures, and associates, are mostly involved in promotional activities relating to a broad spectrum of financial services, including but not limited to financing, insurance, investment, healthcare, technology, digital healthcare platforms, stockbroking, etc. These services also include marketing and servicing through digital platforms.

Bajaj Finserv continued to scale its new businesses such as Bajaj Finserv Health, Bajaj Finserv Direct, Bajaj Finserv Asset Management, and Bajaj Finserv Ventures. The losses from these new businesses were Rs 95 crore in Q3 FY25 as compared to Rs 105 crore in Q3 FY24 which, per KRChoksey Shares and Securities, is in line with the company's expectations.

Bajaj Finserv’s performance in Q3 FY25 was fairly consistent, buoyed by sharp increases in the company’s lending operations (Bajaj Finance and Bajaj Housing Finance), whereas its insurance arms dealt with competition and regulatory changes. Motor TP loss ratio as well as health insurance underwriting price regulations considerably affected BAGIC’s margins.  

At the same time, BALIC kept pushing sales of other high-margin protection and ULIP products, although growth in new business premium was less than required. Bajaj Finserv continues to be well positioned for long-term growth due to the focus on technology-enabled financial services, expansion into health and asset management, and disciplined capital spending, the brokerage firm said in the Q3 result update.