Non-banking financial company Bajaj Finance's shares soared to a record high in trade on March 21, after Rajeev Jain, the managing director of Bajaj Finance, has been elevated to the board of Bajaj Finserv in an executive capacity.
At 9.40 am, Bajaj Finance shares were quoting Rs 8,939.5 per share, higher by 3 percent, after hitting a lifetime high of Rs 9,089.00 apiece. This comes amid the succession planning exercise is underway at Sanjiv Bajaj-led Bajaj Finserv group.
In his new role, Rajeev Jain would be spending a significant part of his time overseeing Bajaj Finance, but he may also supervise some of the newer initiatives of the group, such as those in healthcare, as well as lend support to the transition in the group’s insurance companies.
Bajaj Finance is promoted by Bajaj Finserv, which holds around 54 percent stake in the Rs 3.25 lakh crore lending arm.
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Amid the development, brokerages have rushed to hike their target prices on the NBFC. CLSA issued the highest price target of Rs 11,000 per share of Bajaj Finance, which indicated an upside of 27 percent from the previous session's closing price.
BofA Securities reiterated its 'buy' tag, while hiking its target price to Rs 10,500 per share. The recent developments have addressed a key overhang, and the succession plan is "well executed", said the brokerage.
Citi Research and Morgan Stanley also bumped up their price targets to Rs 10,200 and Rs 10,500, respectively, while maintaining their optimistic 'buy' calls.
In a note, Citi wrote, "Leadership continuity and strategic clarity lends unwavering credence to seamless execution and mitigates concerns around management transition risk." Morgan Stanley stated that Rajeev Jain's continuity at Bajaj Finance should improve investor confidence and sentiment, along with ending a long-term uncertainty.
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