1100% Dividend Payout: Bajaj Group's Flagship Firm To Trade Ex-Dividend This Week For Rs 110 Dividends; Buy?

The flagship firm of behemoth Bajaj Group, aka Bajaj Holdings & Investment will be in focus on Monday as the stock will trade ex-dividend for a massive 1100% dividend payout to shareholders. In the trading week ahead of the ex-dividend date, from September 18th to 22nd, Bajaj Holdings shares gained by a little over 3.5% on BSE.

Bajaj Holdings has considered and declared an interim dividend of Rs 110 per share having a face value of Rs 10 each for the financial year ending March 31, 2024. In percentage terms, the dividend payout will be 1100%.

For this dividend, the company set September 29 as the record date for the purpose of determining the members eligible to receive the interim dividend. The ex-dividend date will be the same as the record date.

It means that those shareholders who have Bajaj Holdings shares in their demat accounts by the end of business hours of September 29, will be eligible for an 1100% dividend payout.

Dividends are distributed also in a certain proportion by listed companies from their net profits earned in a respective financial year. The record date is proposed by the listed company's board of directors to determine the name of the eligible shareholders for dividends. As per BSE FAQs, to be eligible to receive dividends, investors have to have shares in the Demat account by record date. Meanwhile, the ex-dividend date is the day when the price of the equity share of the listed company gets adjusted for the dividend payout.

This Bajaj-backed firm plans to credit or dispatch an 1100% dividend on or around Friday, October 13, 2023.

On Friday, last week, Bajaj Holdings' share price ended at Rs 7,334.15 apiece, marginally down from the previous session's print on BSE. Its market cap was over Rs 81,624 crore.

In the June 2023 quarter, Bajaj Holdings consolidated net profit stood at Rs 1,416 crore, rising by a whopping 46% from its profit of Rs 969 crore in the same quarter a year ago. Bajaj Holdings is the parent company of listed stocks namely Bajaj Auto, Bajaj Finserv, Bajaj Finance, Bajaj Electricals and Maharashtra Scooters.

Bajaj Holdings' share price has gained by over 31% on BSE so far in 2023. In 5 years, the stock will become a multi-bagger with returns of nearly 138% as of now.

Bajaj Holdings is the flagship of the Bajaj group of companies. Bajaj Holdings & Investment Limited (BHIL) - erstwhile Bajaj Auto Limited was de-merged as per an order dated December 18, 2007, by the Bombay High Court, whereby its manufacturing undertaking has been transferred to the new Bajaj Auto Limited and its strategic business undertaking consisting of wind farm business and financial services business has been vested with Bajaj Finserv Limited.

Notably, all the businesses and all properties, assets, investments and liabilities of erstwhile Bajaj Auto Ltd, other than the manufacturing undertaking and the strategic business undertaking, remain with BHIL.

Post-demerger, BHIL holds more than 30% shares each in BAL and BFS. As per the website, going forward, BHIL will focus on new business opportunities. BAL and BFS will be able to tap (on an arm's length basis) into BHIL's cash pool to support future growth opportunities. BHIL by having over 30% stake in both BAL and BFS will benefit from the future growth of these companies.

In FY23, the company paid a dividend of 1230% aggregating to Rs 123 per share to its shareholders.

As per Trendlyne data, of a total of 123 votes, 75.61% have recommended buying Bajaj Holding shares, while 15.45% suggested selling and 8.94% suggested holding the stock. Further, the average brokerage target for Bajaj Holdings is at Rs 7,615 per share, indicating a nearly 4% potential upside ahead.

Also, the stock's Relative Strength Index (RSI) and Money Flow Index (MFI) are in the mid-range of 56.6 and 44.4 respectively. The stock's PE TTM and Price-To-Bool-Value are below the industry median at 15.4 and 1.58 respectively. 1-year beta is at 0.4, indicating very low volatility.

Disclaimer:

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