Bajaj Auto Ltd’s board, a major player in two and three-wheelers, has given the green light to a substantial Rs 4,000 crore share buyback at Rs 10,000 per share, marking a 43 percent premium to the last closing price.
About Bajaj Auto
Bajaj Auto is an Indian multinational automotive manufacturer headquartered in Pune, known for bikes, Qutes (quadricycles), and electric three-wheelers. Starting with motorcycles, they’ve expanded into three-wheelers and are now making strides in quadricycles, showcasing their commitment to diverse and cutting-edge automotive offerings.
Product Range
- Pulsar: Sporty motorcycles known for top-notch performance and style..
- Dominar: Premium touring bike featuring a powerful engine and advanced features.
- Avenger: Cruiser bike with a comfortable riding posture and long-distance capabilities.
- Platina: Commuter bike with high fuel efficiency and low maintenance cost.
- CT: Budget-friendly bike offering reliable performance and durability.
- Chetak: Electric scooter with a futuristic design and smart features.
Bajaj Auto Share Buyback Program Details and Stakeholder Participation
The company plans to acquire 40 lakh shares through the tender route, constituting 1.41 percent of Bajaj Auto’s outstanding shares. Notably, even the promoters, who currently hold a 54.94 percent stake, will participate in this buyback initiative. The Board has set up a Buyback Committee and delegated the necessary powers for smooth execution.
Shareholder Approval and Record Dates
While subject to shareholder approval through a special resolution via a postal ballot, the specific details, including record dates, are yet to be disclosed. This move follows Bajaj Auto’s similar share buyback in July 2022, where shares worth Rs 2,500 crore were acquired at Rs 4,600 each. According to Bajaj Auto Managing Director Rajiv Bajaj, this buyback is anticipated to be even more substantial.
Financial Outlook and Positive 2023 Performance
Rajiv Bajaj further stated that Bajaj Auto is poised to conclude the 2024 financial year with a robust cash balance of Rs 20,000 crore, emphasizing the company’s excellent performance throughout 2023.
Bajaj Auto Stock Performance and Closing Notes
As of January 8, the Bajaj Auto stock concluded at Rs 6,980, maintaining near-flat performance compared to the previous close. Despite a 1 percent decline in the benchmark Nifty50, the stock has outperformed, gaining nearly 5 percent since the buyback announcement. Over the past year, it has surged by an impressive 93 percent, securing its position as the second-best performer on the index, trailing only behind Tata Motors.
Key takeaways
1. Bajaj Auto board greenlights Rs 4,000 crore buyback at Rs 10,000/share, a 43% premium.
2. Promoters and company will buy 40 lakh shares, representing 1.41% of outstanding shares.
3. The board forms a Buyback Committee, granting discretionary powers for necessary actions.
4. Buyback subject to shareholder special resolution via postal ballot; record dates to be announced.
5. Bajaj Auto’s second share buyback in two years, projected to be significantly larger than the Rs 2,500 crore buyback in July 2022.
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