Shares of leading non-banking financial company Bajaj Finance Ltd slipped on Tuesday, July 22, after managing director Anup Kumar Saha tendered his resignation due to personal reasons.
In a filing with the bourses, the firm noted that Saha also also resigned from his position as a director in the board of the company, the filing said. Significantly, Saha is seen as the potential candidate for IndusInd Bank's top position of MD and CEO.
"I take this opportunity to thank the Board, the management team, and all stakeholders of the company for their support and trust during my tenure. I remain committed to ensuring a smooth and seamless transition, and I am available to support the company during this period, as may be required," Saha said in his resignation letter.
Moreover, the company has assigned the additional responsibility of MD to Rajeev Jain and re-designated his position as vice chairman and MD till the remainder of his term that ends on March 31, 2028, the company said.
At 9.30 a.m., shares of the firm were quoting Rs 942.15, lower by 0.7 percent on the NSE.
According to global brokerage Morgan Stanley, Saha's resignation is a setback to Bajaj Finance's succession planning, yet the situation appears to be manageable.
Emkay Global concurred, adding that against this backdrop, this development does not come as a complete surprise to investors and could possibly lead to a positive reaction by Bajaj Finance shares in the immediate term, as it provides clarity about Jain being the MD for nearly three more years.
"However, over the medium term, this development could potentially raise some concerns regarding the management succession plan at Bajaj Finance, as Saha was groomed internally for over 7 years to take over the leadership and has stepped down in less than two quarters," noted the brokerage.
While the near-term management continuity is likely a relief for investors, the management succession plan is back at the table for the Board. Against the backdrop of Bajaj Finance continuing to gain size and its possible transition to becoming a bank, at some stage post-CY28, focus on the succession planning is bound to return; for now, Jain coming back to the helm lends huge support to Bajaj Finance, added Emkay.
Emkay Global maintained its 'add' rating on Bajaj Finance shares, awaiting its earnings show for the June quarter, due on July 24, before making changes to its recommendation.
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