Bajaj Finserv outperforms Nifty50 with YTD 25% gains

Bajaj Finserv shares in Tuesday's trade zoomed over 3 per cent to the day's high of Rs 1,955.5 per share on the BSE. The gains in the stock came as the Reserve Bank of India (RBI) introduced new priority sector lending (PSL) norms for April 1, 2025.

The stock has been an outlier, outperforming the benchmark Nifty50 index- with a return of as much as 25 per cent - taking day's high price into consideration.

At the last count, shares of Bajaj Finserv were up over 2 per cent or Rs 40.2 at Rs 1,935, while the Nifty50 erased its intraday gains and was up mildly by just 0.11 per cent or 26.55 points at 23,684.9. 

Bajaj Finserv share price performance 

The stock trades near 52-week high, having surged 25 per cent year-to-date. While in the last one year, the stock has gained over 22 per cent.

JM Financial maintains buy

Bajaj Finserv has announced the acquisition of Allianz SE’s 26 per cent equity stake in its two insurance joint ventures – Bajaj Allianz General Insurance Company (BAGIC) and Bajaj Allianz Life Insurance Company (BALIC). The total transaction is valued at INR 24,180 crore bn, with the implied valuations of BAGIC and BALIC standing at INR 53,000 crorebn and INR 40000 crore, respectively. This transaction marks the conclusion of the 24-year strategic partnership between Bajaj Group and the global insurer Allianz. Upon completion of the acquisition, the ownership structure of both insurance companies will stand as follows: a) Bajaj Finserv will increase its holding to 75.01 per centin both BAGIC and BALIC, consolidating control with an additional 1.01 per cent stake acquisition, b) Bajaj Holdings and Investment Ltd. will acquire 19.95 per cent stake, and c) Jamnalal Sons Pvt. Ltd. will hold 5.04 pe cent stake. As a result, the Bajaj Group will collectively own 100 per cent of the equity in both BAGIC and BALIC post-acquisition.

Additionally, Bajaj Finserv will acquire Allianz’s entire equity interest in Bajaj Allianz Financial Distributors Ltd., a 50:50 joint venture, for a consideration of up to INR 125mn. The transaction is subject to approvals from the IRDAI and the CCI, which will drive the timeline for completion, noted JM Financial.

Implied holdco discount has expanded recently to 28.7%, against an average of 19.9% since Apr’19, which indicates under-valuation and a good opportunity to enter the Bajaj Finserv growth story.

The brokerage has set the target at Rs 2,100. We assign INR 184 per share for the life insurance subsidiary, INR 282 per share for the general subsidiary, INR 1,461 per share for Bajaj Finserv's c.51.3% stake in BAF (at our target price, with a 20% holdco discount) and INR 173 for the new initiatives within the Bajaj Finserv umbrella. Using SOTP, we arrive at a target price of INR 2,100 for Bajaj Finance, it added.