News

Published: January 9, 2024
Updated: January 9, 2024

Bajaj Auto Announces Rs 4,000 Crore Share Buyback at Premium Price

Bolstering Shareholder Value

In a strategic move to enhance shareholder value, Bajaj Auto Ltd has given the nod for a massive Rs 4,000 crore share buyback at an impressive price of Rs 10,000 per share. This decision, made by the company's board, reflects confidence in the company's performance and a commitment to rewarding investors.

Premium Offering

The buyback comes at a substantial premium of 43 percent to the last closing price, underlining the company's optimism in its future trajectory. This move aims to acquire 40 lakh shares via the tender route, constituting 1.41 percent of Bajaj Auto's outstanding shares.

Promoter Participation

Notably, the promoters, holding a 54.94 percent stake in the company, are set to actively participate in the buyback. This aligns with the company's overall goal to align the interests of shareholders and promoters.

Board's Authority

To facilitate the buyback, the Board has formed a Buyback Committee, granting it the authority to take necessary actions deemed fit. This empowerment allows the committee to act in the best interest of the company and its stakeholders.

Shareholder Approval

While the board has given the green light, the buyback is contingent on shareholder approval through a special resolution via a postal ballot. The company will provide further details, including record dates, at a later stage.

Financial Fortitude

This move follows Bajaj Auto's previous share buyback in July 2022 and reflects the company's robust financial position. Managing Director Rajiv Bajaj anticipates that the company will conclude the fiscal year 2024 with an impressive cash balance of Rs 20,000 crore.

Market Performance and Outlook

Despite a flat closing at Rs 6,980 on January 8, Bajaj Auto's stock has been a standout performer in the last year, gaining over 93 percent. This positions it as the second-best performer on the index, trailing only behind Tata Motors. With an optimistic outlook for the future, Rajiv Bajaj hints at a buyback that will surpass the scale of the one executed in 2022.

Premium buyback makes Bajaj Auto a front runner in Shareholders welfare

Bajaj Auto's latest share buyback is a testament to its commitment to creating value for shareholders. With a robust financial foundation, strategic planning, and market outperformance, the company remains poised for continued success in the automotive sector.