New Delhi: After being at the helm of Bajaj Finance for more than three decades, industrialist Rahul Bajaj will step down as the company''s Non-Executive Chairman on July 31 and his son Sanjiv Bajaj will succeed him. The announcement on Tuesday, made as part of succession planning, also came on a day when Bajaj Finance reported a 19 per cent decline in consolidated net profit at Rs 962.32 crore in the June quarter. Shares of the company also took a beating on the bourses and slumped over four per cent. "Rahul Bajaj, Non-Executive Chairman of the company, having been at the helm of the company since its inception in 1987 and the group for over five decades, as part of succession planning, has decided to demit the office as Chairman of the Board with effect from close of business hours on July 31, 2020," the company said in a regulatory filing during the market hours.
He will continue to serve the company as a Non-Executive Non-Independent Director. The company''s board has approved the appointment of Sanjiv Bajaj as Non-Executive Chairman from August 1. Sanjiv Bajaj is currently the Vice Chairman of the company. On account of higher provisioning, the non-banking financial company''s consolidated net profit fell to Rs 962.32 crore in the three months ended June 2020 from Rs 1,195.25 crore reported in the year-ago period. Sequentially, the consolidated net profit was higher compared to Rs 948.10 crore in the quarter ended March 2020. Total consolidated income rose to Rs 6,649.74 crore in the quarter ended June 2020 from Rs 5,807.76 crore in the same period a year ago. The consolidated financial results include earnings from Bajaj Housing Finance and Bajaj Financial Securities, the two fully-owned subsidiaries of the company.
Bajaj Finance said the COVID-19 pandemic and the consequent lockdown has considerably impacted the group''s business operations in the June quarter. "Apart from other adverse effects, the pandemic has also resulted in a significantly lower business acquisition and put constraints on recovery of overdues from customers during the quarter ended June 2020," the company said. Loan losses and provisions in the June quarter rose to Rs 1,686 crore as against Rs 551 crore reported in the year-ago period. The group has recognised an additional contingent expected credit loss provision of Rs 1,450 crore during the quarter, taking the overall contingent expected credit loss provision to Rs 2,350 crore as on June 30, 2020, it added.
Besides, the group has reversed expected uncollectible component of capitalised interest amounting to Rs 219.51 crore charged on loans under moratorium based on the estimates and judgement of the company, it said. According to the company, given the dynamic and evolving nature of the pandemic, these estimates are subject to uncertainty and may be affected by the severity, duration of the pandemic and other variables. On Tuesday, Bajaj Finance shares tumbled 4.31 per cent to close at Rs 3,292.90 apiece on the BSE. During the day, it plunged 6.43 per cent to Rs 3,220. On the NSE, the shares slumped 3.99 per cent to settle at Rs 3,304. The scrip was also the biggest laggard on both BSE 30-share index and NSE Nifty.
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