According to Morgan Stanley, a key catalyst for the stock is the announcement of Rajeev Jain’s new role before March 31, when his current term comes to an end. The brokerage firm sees a higher possibility of him continuing to have a role at Bajaj Finance, which would be viewed positively by investors.
Potential outcomes and market impact
Morgan Stanley has outlined three possible scenarios if Rajeev Jain assumes a senior role involving supervision and strategy:
Scenario 1: If Rajeev Jain assumes a position within Bajaj Finance, the stock could see an upside of 5-10%.
Scenario 2: If he takes on a role in both Bajaj Finance and Bajaj Finserv, the stock could see a potential upside of 5-10%.
Scenario 3: If Jain assumes a role in Bajaj Finserv only and no direct role in Bajaj Finance, the stock may witness a 5-8% downside.
Morgan Stanley said the implications are more sentiment-driven, influencing valuation multiples rather than the company’s core fundamentals.
In an exclusive interaction with CNBC-TV18 on Tuesday, March 18, Bajaj Finserv Chairman and Managing Director Sanjiv Bajaj said that Rajeev Jain is fully committed to the business, and the board will take a call on his continuation.
“The board meeting is scheduled later this week, and the board will take a call,” Sanjiv Bajaj said.
Jain intends to remain at the company and “hopefully” be actively involved in shaping the strategies of the company and its subsidiaries.
“This is how I would look at the future role, subject to how the board decides,” he said at Bajaj Finance’s post-earnings call on January 30.
Rajeev Jain had joined Bajaj Finance as CEO in 2007 and became its Managing Director in 2015. Jain was reappointed as Managing Director again in March 2020 for a period of five years.
Shares of Bajaj Finserv are trading 1.55% lower on Tuesday at ₹1,842.65, while the Bajaj Finance stock was trading 0.67% higher at ₹8,638.
