Bajaj Finance shares falls 5 percent after second wave of lockdown
Published On: Monday, June 7, 2021 | By: Team KnowMyStock
Shares of Bajaj Finance (BAF) declined 5 percent to Rs 5,681 apiece on the BSE in Monday's intra-day trade after the NBFC issued an update about the effect of the Covid-19 wave on the financials of the firm. The share hit 52 weeks high of Rs 6,009 on June 4, 2021, and 52 weeks low of Rs 2,199 on June 12, 2020. In its mid-quarter update, the firm said B2B and auto finance businesses were most affected due to strict lockdowns in the majority of states. The lender’s business-to-business segment has been hit hard, with most shops and establishments staying shut in May. The second segment most impacted was vehicle loans, the lender said. These businesses delivered 70% of their planned volumes in April 2021 as multiple states started imposing lockdowns from mid-April. Their volumes dropped to 40% in May 2021.
Asset quality too was hit hard. The lender has witnessed a drop in collections and an increase in bounce rates of equated monthly installments. In other words, more loans are being defaulted upon than originally anticipated.
The company hopes that activity will normalise by July. “This update is based on information available to date and with an expectation that economic activity will normalize by early July," the lender said in its exchange filing.
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