Bajaj Finance has emerged as a rare relative outperformer among large-cap Indian financial equities during a severe market downturn characterized by heavy foreign institutional outflows. While benchmark indices faced a steep correction in September 2026, with the Nifty dropping roughly 6% and foreign investors offloading $2.7 billion of Indian equities to take year-to-date outflows to $26.8 billion, Bajaj Finance exhibited strong resilience with a mild year-to-date decline.
According to Kotak Neo, the relative strength of the institution is underpinned by a newly announced Rs 17,500 crore capital-raising initiative. According to Kotak Neo, the company's board approved raising Rs 11,700 crore through a qualified institutional placement (QIP) alongside Rs 5,800 crore via warrants issued to promoter Bajaj Finserv. Brokerage firm Jefferies noted that the capital infusion exceeds initial expectations, amounting to approximately 3% of the company's market capitalization and 13% of estimated net worth for fiscal 2027.
The warrant issuance to Bajaj Finserv allows the holding entity to preserve its 51.30% ownership share in the non-banking financial company. The board formally sanctioned the capital plan through a late-night regulatory filing on Thursday.
Financial analysts project that the capital raise will lift estimated book value per share for fiscal 2028 by 8%, while keeping earnings per share broadly flat and exerting only a marginal dilution on return on equity. Jefferies maintained its positive stance on the stock, noting that leverage remains well-managed at 4.9 times alongside a retained return on equity of 17%.
The fundraise marks Bajaj Finance's first equity fundraising since its Rs 10,000 crore capital raise in November 2023.
Institutional support for the lender has broadened following an upgrade by UBS, which shifted its rating on Bajaj Finance from Sell to Neutral and raised its price target to Rs 1,100 from Rs 910. UBS cited measurable improvements in asset quality across unsecured product segments and an increased provision coverage ratio that acts as an effective cushion against prevailing macroeconomic headwinds.
For Bajaj Finance Balance Sheet Scale, Bajaj Finance's loan book is more than Rs 5 lakh crore, and consolidated net profit increased 27% year-on-year to Rs 5,986 crore during the quarter. UBS upgraded its rating for shares of Bajaj Finance to Neutral from Sell and increased its price target to Rs 1,100 from Rs 910.
Underlying business metrics continue to support institutional confidence. During the first quarter of fiscal 2027, Bajaj Finance reported robust assets under management (AUM) growth of 24% year-on-year, stable net interest margins contrasting with industry peers, steady asset quality enhancement, and lower credit costs that allowed net profit to beat consensus estimates by 5%.
Management has maintained guidance for sustained growth momentum, emphasizing profit expansion exceeding AUM growth driven by strict operational cost discipline and robust risk management frameworks. Fresh capital provides the institution with adequate headroom to expand loan books by roughly 23% without overextending financial leverage.
Despite Bajaj Finance's outperformance, the broader Indian equity market remains under considerable technical pressure. The Nifty recently breached its 200-week moving average and dipped below the crucial 22,600 threshold for the first time since the pandemic-driven market crash of 2020. Market analysts note that the index has recorded its longest weekly losing streak in 25 years, prompting cautionary advisories for short-term participants to reduce high long exposure until decisive technical reversals occur.
