Two and three-wheeler major Bajaj Auto Ltd board on January 8 approved a Rs 4,000 crore share buyback at Rs 10,000 apiece. This is at a premium of 43 percent to the last closing price.
The company will be buying 40 lakh shares via tender route, representing 1.41 percent of Bajaj Auto's outstanding shares. Promoters of the company will also be participating in the buyback. Currently, the promoters hold a 54.94 stake in the company.
The automaker said the Board has constituted a Buyback Committee and has delegated the power to do all such acts, deeds, matters and things as it may, in its absolute discretion, deem necessary, expedient or proper in connection with the buyback.
The buyback is subject to approval of the shareholders by means of a special resolution through a postal ballot. The record dates and other details will be announced later.
This is Bajaj Auto's second share buyback in as many years. The auto major in July 2022 purchased shares worth Rs 2,500 crore from holders at Rs 4,600 a unit. Last week, Bajaj Auto Managing Director Rajiv Bajaj told CNBC-TV18 that the buyback would be far bigger this time.
Bajaj Auto would end the financial year 2024 with a cash balance of Rs 20,000 crore, he said, adding the company has had an excellent 2023.
On January 8, the Bajaj Auto stock closed at Rs 6,980, nearly flat from the previous close, outperforming benchmark Nifty50, which fell a percent. The stock has gained nearly 5 percent since the buyback was announced. In the last year, it has gained over 93 percent, becoming the second-best performer on the index behind Tata Motors.
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