Bajaj Finance Stock: Motilal Oswal kept his ‘Buy’ call on the stock and said any significant correction in the stock price due to this incident should be used as a preservation opportunity.

Meanwhile, Bajaj Finance may continue to issue Insta EMI cards and the restriction is only on digital loan approval and disbursement through these Insta EMI cards, analysts said.

Shares of Bajaj Finance Ltd fell 4 per cent in Thursday’s trade after the Reserve Bank of India (RBI) asked it to stop disbursing loans under two of its loan products, ‘Ecom’ and ‘Insta EMI Card’ with immediate effect. Said.

Bajaj Finance management expects the ban to be lifted within the next 6-8 weeks. “The belief behind this was that the deficiencies identified by the RBI could be rectified within the next 2-3 weeks, and the RBI could then review the reforms made by the BAF and lift the restrictions within the next 4-5 weeks Is.

We acknowledge that the RBI intends to observe Bajaj Finance’s compliance with digital lending guidelines for a longer period before lifting the restrictions, Motilal Oswal Securities said.

Meanwhile, Bajaj Finance may continue to issue Insta EMI cards and the restriction is only on digital loan approval and disbursement through these Insta EMI cards, analysts said. Following the development, the stock fell 3.93 per cent to a low of Rs 6,940 on the BSE.

 

We believe Insta EMI card acquisitions/issuances may decline over the next 45-90 days due to restrictions on digital loan approvals and disbursements on Insta EMI cards. Till recently, Bajaj Finance has been doing a quarterly run-rate of Rs 650-6,80,000 Insta EMI card acquisitions. Insta EMI cards CIF of Rs 4.2 million constitute 10 per cent of the total outstanding EMI cards and contribute 5.5 per cent to Bajaj Finance’s total customer franchise, Motilal Oswal said.

The domestic brokerage has maintained its ‘Buy’ recommendation on the stock and said any significant correction in the stock price due to this incident should be used as an accumulation opportunity.

Apart from deficiencies in key fact statements issued in respect of other digital loans sanctioned by NBFCs, non-issuance of key fact statements to borrowers under the two loan products led to the RBI ban.

 

This announcement came after the market closed on Wednesday. The stock fell 1.84 per cent to Rs 7,223.95 in an otherwise strong trading session on Dalal Street.