Bajaj Finance Share Price Falls 2.9% on Regulatory Concerns

Shares of Bajaj Finance fell as much as 2.9% on Wednesday as regulatory overhangs and concerns about future income growth overshadowed a strong second-quarter performance. The Bajaj Finance share price was trading 2.1% lower at 937.2 rupees at 10:16 a.m. IST, while the benchmark Nifty 50 index was up 0.3%.

By early afternoon the decline had deepened, with the Bajaj Finance stock down about 3.2% at 926.80 rupees. The Bajaj Finance share price finished among the weakest stocks on the Nifty 50 on a day when the broader market held its ground. The sell-off came two days after the company reported its July-September quarter results, with Indian markets shut on Tuesday for a public holiday.

Bajaj Finance share price falls despite Q2 profit jump

The company reported a nearly 30% year-on-year rise in consolidated profit after tax for the second quarter. Net profit stood at 6,367 crore rupees, while net interest income rose 24% to 13,335 crore rupees. Assets under management grew 26% to 5.85 lakh crore rupees, and new loans booked rose 11% to 13.45 million. Asset quality also improved year on year, with gross non-performing assets falling to 1.06% from 1.24% and net non-performing assets easing to 0.42% from 0.60%.

Those numbers did little to lift sentiment, and the Bajaj Finance share price slide underlined how investors are looking past reported earnings. The market reaction showed that NBFC regulatory risk now weighs more than a good quarter.

Three regulatory overhangs face the Bajaj Finance share price

Jefferies warned of possible restrictions on flexi-loans, products that let customers borrow, repay and borrow again within an approved limit and which account for about 5% of the company's assets under management. The brokerage also pointed to tighter insurance commission rules, which could shrink a fee business that contributed about 8% of the lender's fiscal 2026 profit before tax. Jefferies cut its target price to 1,230 rupees from 1,280 rupees.

PhillipCapital listed three regulatory overhangs: draft RBI revolving loan rules, possible changes to insurance commission rules and revised gold-loan rules. The brokerage said an outright ban on revolving loans could temporarily hurt growth in assets under management and slightly compress margins and profitability. For investors watching the Bajaj Finance share price, the NBFC regulatory risk now outweighs the quarterly numbers.

Inflation risk adds to Bajaj Finance share price caution

Nomura took a different line of caution. The brokerage said a rising interest-rate environment was likely to create marginal headwinds for net interest margins, while also pointing to a sequential weakening in asset quality. Those two factors explain why the Bajaj Finance share price gave up ground even as reported profits rose. It trimmed its earnings-per-share estimates for fiscal 2028 and fiscal 2029 by 2% to 3%.

Rising inflation has pushed the central bank to signal a tighter monetary policy path, brokerages noted. Higher borrowing costs for the lender, combined with weaker repayment capacity among retail borrowers, could squeeze margins from both sides. Gold loans brought their own warning sign: Bajaj Finance said the proportion of its 24,000-crore-rupee gold loan book overdue by more than 30 days had risen, lifting overall stage-two and stage-three assets by 15 basis points from the previous quarter. The company has stopped offering short-term gold loans. The central bank has not finalised the revolving loan rules, but markets rarely wait for the final text.

Analysts remain broadly positive on the Bajaj Finance stock. The shares are rated "buy" on average by 34 analysts with a median target price of 1,195 rupees, according to data compiled by LSEG. The stock closed the session among the biggest losers on the Nifty 50 and is down nearly 5% so far this year, leaving the Bajaj Finance share price recovery dependent on how the regulatory proposals land.