Bajaj Finance At Three-Month Low After RBI Action Against Two Digital Lending Products

Shares of Bajaj Finance Ltd. fell to near three-month low on Thursday after the Reserve Bank of India barred it from lending under its “eCOM” and “Insta EMI Card” products. 

“This action is necessitated due to non-adherence of the company to the extant provisions of digital lending guidelines of Reserve Bank of India, particularly non-issuance of key fact statements to the borrowers under these two lending products and the deficiencies in the key fact statements issued in respect of other digital loans sanctioned by the company,” the RBI said in a statement on Wednesday. 

The regulator said that it would review the supervisory restrictions after the company rectifies the deficiencies to the RBI’s satisfaction. 

Shares of the company fell 4.06% to Rs 6,931.25 apiece, the lowest level since Aug. 21. It pared losses to trade 1.97% lower at Rs 7,082.25 apiece, as of 9:34 a.m. This compares to a 0.15% decline in the NSE Nifty 50 Index.

The shares have risen 7.65% on a tear-to-date basis. Total traded volume so far in the day stood at 11 times its 30-day average. The relative strength index was at 27, implying that the stock maybe oversold.

Out of the 34 analysts tracking the company, 26 maintain a ‘buy’ rating, four recommend a ‘hold’ and four suggest a ‘sell’ the stock, according to Bloomberg data. The average 12-month consensus price target implies an upside of 28.8%.

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