Updated January 9th, 2024 at 09:21 IST
Bajaj Auto approves Rs 4,000 crore share buyback at Rs 10,000 per share
The buyback plan involves repurchase of 40 lakh shares through the tender route, representing 1.41 per cent of Bajaj Auto.
Bajaj Auto share buyback: Bajaj Auto on Monday approved Rs 4,000 crore share buyback plan, valuing each share at Rs 10,000. The decision, which comes at a 43 per cent premium to Monday's closing price, underscores the company's commitment to enhancing shareholder value.
The buyback plan involves repurchase of 40 lakh shares through the tender route, representing 1.41 per cent of Bajaj Auto's outstanding shares. The promoters, who currently hold a 54.94 per cent stake in the company, will actively participate in this buyback initiative.
Image credit: Bajaj Auto
To oversee the buyback, the Board has established a dedicated buyback committee, entrusting it with the authority to take necessary actions in connection with the process. However, the buyback is contingent on receiving the shareholders' approval through a special resolution via a postal ballot. The specific dates and additional details regarding the buyback will be disclosed later.
This marks Bajaj Auto's second share buyback in as many years, following a Rs 2,500 crore buyback in July 2022 at Rs 4,600 per share. Bajaj Auto Managing Director Rajiv Bajaj recently hinted at the scale of this buyback, stating that it would surpass the previous one. The company anticipates ending the fiscal year 2024 with a cash balance of Rs 20,000 crore, reflecting its successful performance in 2023.
Bajaj Auto stock closed at Rs 6,980, showing marginal movement from the previous close but outperforming the Nifty50 benchmark, which witnessed one percent decline.
Since the announcement of the buyback, the stock has witnessed a nearly 5 per cent increase and has gained an impressive 93 per cent over the past year, positioning itself as the second-best performer on the nifty 50 index, trailing behind Tata Motors.
Published January 9th, 2024 at 09:04 IST