Bajaj Finance Share Price soars 13% Intraday

Bajaj Finance, the Pune-based non-banking finance company, expects slow credit growth in its consumption segment business after Prime Minister Narendra Modi's decision to demonetize high-value currency notes. In a regulatory filing, on Tuesday, the NBFC said that all other segments such as personal, business and commercial categories would not be impacted.

This statement had led Bajaj Finance share price to trade at a rise of almost 13%.

Bajaj Finance also made a statement saying that being optional consumption, these businesses of the personal category will have a negative impact in the short-term. It, however, pointed out that financing business will witness a positive uptick in the medium term due to rise in financial infiltration.

In all other groups such as personal, business and commercial; the non-banking finance company doesn't see any negative influence due to demonetization of old high-value currencies. In the personal business category, the NBFC said that the demonetization might lead to lowering of interest rates which are likely to encourage demand in the medium term. Similarly, for business loans, professional loans, loan against property; Bajaj Finance is anticipating an uptrend in the medium term.

At 12:41 PM, Bajaj Finance share price was trading at Rs. 903.30, with the rise of almost 11%.

Taking what some sleet as one of the boldest moves of economic reforms on November 8, the Modi government demonetized Rs 500 and 1,000 notes to check the flow of black money in the system. Though India is the fastest-growing large economy in the world, around 95 per cent dealings in India are still cash-based. This has made tax avoidance easier, leading to the emergence of a parallel economy.

Analysts have already forecasted a hit on NBFCs' balance sheet after the demonetization move on a likely slowdown in loan disbursement and repayment pressure. Earlier, they had said that asset quality of NBFCs would come under pressure in the short term.

Bajaj Finance is the top 500 performing stock, identified by Dynamic Levels for the quarter based on its strong fundamentals. For the support and resistance levels of the stock, visit Bajaj Finance share price forecast page of the Dynamic Levels website.