What was the reason for Bajaj Finance slipping sharply on Wednesday 07 Oct?

Bajaj Finance fell by 5.4% on 07 October after it guided for a weak September quarter. Bajaj Finance reported that while its AUM had grown by 13% to Rs.137,000 crore, new loans had almost halved in the second quarter which is a matter of worry for the company.

Recovery is obviously taking time and the business volumes in the Sep-20 quarter were just about 50–60% of pre-COVID levels. The company has lagged both in terms of number of loans disbursed and number of new customers acquired.

While the company has focused more on asset quality and collections, that has come at the cost of growth. The markets were a tad disappointed that Bajaj Finance had chosen to accelerate provisioning in the second quarter with a view to strengthening its balance sheet.