Bajaj Auto, a prominent player in the two and three-wheeler industry, announced that its board has approved a share buyback program amounting to ₹4,000 crore, with shares priced at ₹10,000 each, on January 8,. This represents a premium of 43 percent compared to the last closing price.
The company is set to acquire 40 lakh shares through the tender route, equivalent to 1.41 percent of Bajaj Auto’s outstanding shares. Additionally, the promoters of the company will actively participate in the buyback, holding a current stake of 54.94 percent in the company.
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“We wish to inform you that the Board of Directors of the Company at its meeting held today, i.e., Monday, 08 January 2024, has approved the proposal for buy-back of up to 4,000,000 fully paid-up Equity Shares of face value of ₹10/- each by the Company (representing 1.41% of the total number of Equity Shares of the Company) at a price of ₹ 10,000 (Rupees Ten Thousand only) per Equity Share payable in cash for a total consideration not exceeding ₹ 4,000 crores,” the company said in its exchange filing.
In this regard, the automaker announced the formation of a Buyback Committee, entrusting it with the authority to undertake all necessary actions, deeds, and matters deemed necessary, expedient, or appropriate in connection with the buyback, at its absolute discretion.
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“The share buyback represents 16.33% and 14.49% of the total paid-up equity share capital and free reserves (including securities premium account) as per the audited standalone financial statements and audited consolidated financial statements of the Company for the financial year ended on March 31, 2023,” it added.
The previous week, when Bajaj Auto disclosed its intention to convene a board meeting to discuss a share buyback, the stock reached an all-time high of ₹7,084. This marks the company’s second instance of initiating a share repurchase program.
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Back in July 2022, Bajaj Auto executed a buyback of shares amounting to ₹2,500 crore, conducting the repurchase at a share price of ₹4,600.
Dalal Street is poised for jubilation over this development, given that the buyback price represents a substantial 43% premium over the current market price. On Monday, Bajaj Auto’s shares concluded at ₹6,983.85 on the National Stock Exchange, reflecting a marginal 0.1% increase from the previous close.
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Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
