Bajaj Finance shares jump 5% after changes in GST rates; here is what you need to know

Sectors such as automobile, FMCG, and insurance, among others, are expected to gain significantly from the GST changes.

Besides, one of the companies that stands to benefit massively from the reforms is Bajaj Finance, note analysts.

Bajaj Finance offers a broad product suite encompassing consumer loans (personal loans, home loans, gold loans, and consumer durable loans), business and professional loans, and financing for specific needs like used cars and medical equipment.

Given the consumption booster shot, people are expected to spend more on items such as TVs, ACs, other electronic items, automobiles, and two-wheelers. A majority of the section of the economy buys these products on EMIs and loans.

Hence, Bajaj Finance stands to benefit in a big way. Banks (both private and public sector lenders) are also expected to benefit from the move.

GST 2.0: Key announcements

The next-generation GST reforms announced by Finance Minister Nirmala Sitharaman on Wednesday, September 3, are expected to provide a major boost to the consumption and demand in the country. The timing could not have been better, as India is grappling with the steep 50% US tariff, and the festive season is just around the corner.

The GST Council approved an overhaul of rates by limiting slabs to 5% and 18%, effective from September 22, the first day of Navaratri.

Almost all personal use items will see rate cuts as the government looks to boost domestic spending and cushion the economic blow of the US tariffs.

Briefing reporters after a marathon daylong GST Council meeting, Union Finance Minister Nirmala Sitharaman said all decisions were taken unanimously, with no disagreement with any state.

All automobiles above 1,200 cc and longer than 4,000 mm, as well as motorcycles above 350 cc, yachts and aircraft for personal use, and racing cars will attract a 40 per cent levy.

Small cars are also set to get cheaper.

Electric vehicles will continue to be charged at 5% GST.

Further, GST on auto components has been reduced to 18% from the current 28%.