Bajaj Group Stock Alert: Why Bajaj Finserv Shares Are Down 2%? Hint! Rs 24,180 Crore Deal

Shares of Bajaj Finserv opened on a weak note on Tuesday, a day after the company announced that Allianz SE is leaving their 24-year-long joint ventures in the insurance segment.

Allianz SE has signed binding agreements to sell its 26% stake in Bajaj Allianz General Insurance Company (BAGIC) and Bajaj Allianz Life Insurance Company (BALIC) to Bajaj Group in a deal worth Rs 24,180 crore.

Bajaj Finserv shares were trading 1.91% lower at Rs 1836.05 per share on BSE on Tuesday at 11 am. The company's market capitalisation stood at Rs 2,93,155.14 crore on BSE.

In another development, Bajaj Finserv Chairman and Managing Director Sanjiv Bajaj on Tuesday said that the company is planning a stellar debut of Bajaj's life and general insurance arms in the stock market. In an exclusive conversation with CNBC-TV 18, Sanjiv Bajaj confirmed that Bajaj Finserv's life and general insurance arms's IPO will be launched in a suitable time. However, he refrained from providing a fixed timeline for Bajaj Finserve's insurance arms' IPO.

Take a Poll

Allianz SE exits Bajaj Allianz joint ventures after 24 years

The board of directors meeting, held on Monday, 17 March, approved the proposal of Allianz to exit the joint ventures. The exit may come into effect after necessary regulatory approvals. Bajaj is purchasing Allianz SE's 26% equity stake in each of the insurance joint ventures to the group.

As per Bajaj Finserv's BSE filing, Allianz used to own 26% stake in its insurance companies vis BAGIC and BALIC.

As per the agreement to terminate joint venture, Bajaj Allianz, "would be acquiring from Allianz, 11,13,295 equity shares of INR 10 each in BAGIC at a price of INR 4,808.24 per share and 15,22,161 equity shares of INR 10 each in BALIC at a price of INR 2,654.12 per share, amounting to 1.01% equity stake in each of the companies, together with all rights, title, benefits and interest therein, as per the SPAs executed with Allianz"

After the completion of the acquisition, Bajaj will now hold a total of 75% of the total equity share capital in BAGIC and BALIC. The company has also proposed stake sale in the two insurance companies to Bajaj Holdings and Investment Ltd and Jamnalal Sons Pvt. Ltd.

As per the BSE filing, "Bajaj Holdings and Investment Ltd. and Jamnalal Sons Pvt. Ltd. will acquire approximately 19.95% and 5.04% of the paidup equity capital, respectively, in each of the two insurance companies"

Upon acquisition as indicated above, the entire equity share capital in the said two insurance companies will be held by the Company (75.01%) and the said Promoter entities (collectively 24.99%). In addition, the Board in line w
Stake sale in Bajaj Allainze Financial DIstributors Limited (BAFDL)

Apart from the two joint ventures in insurance business, Bajaj Group will double its stake in Bajaj Allianz Financial Distributors Limited (BAFDL) by acquiring the stakes held Allianz in the company. The company was a 50:50 joint venture with Bajaj.
For this Bajaj "would be acquiring 12,00,000 equity shares of face value of INR 10 each in BAFDL for a consideration not exceeding INR 12.5 crore from Allianz."