January 9, 2023
New Delhi, India
Bajaj Auto’s Bold Move
Bajaj Auto, a key player in the two and three-wheeler industry, has greenlit a ₹4,000 crore share buyback program, setting the buyback price at ₹10,000 per share. This move comes with a notable 43% premium over the last closing price, signalling confidence and value for investors.
Details of the Buyback:
The board’s approval encompasses the acquisition of 40 lakh shares, equivalent to 1.41% of Bajaj Auto‘s outstanding shares. Promoters, currently holding a 54.94% stake, will actively partake in the buyback.
Financial Impact and Committee Formation:
The buyback represents a significant portion of the company’s total paid-up equity share capital and free reserves. A dedicated Buyback Committee has been formed to oversee the process, ensuring transparency and efficiency.
Previous Buyback and Market Response:
This marks Bajaj Auto’s second share repurchase initiative. In July 2022, a buyback of ₹2,500 crore was executed at ₹4,600 per share. The market responded positively, with the stock reaching an all-time high of ₹7,084 following the recent disclosure of the buyback intention.
Also Read: Zee Entertainment’s Share Price Plunge Amidst Uncertainty Over Sony Merger
Current Stock Performance:
As of the latest update, Bajaj Auto’s shares is doing at Rs. 7,117 on the National Stock Exchange, indicating a marginal 0.1% increase from the previous close.
Strategic Implications and Dalal Street Expectations:
The decision to offer a substantial premium over the market price demonstrates a strategic move to enhance shareholder value. Dalal Street is expected to welcome this development, anticipating positive market reactions.
Also Read: Indian Mutual Fund Industry Surpasses Rs 50 Trillion AUM Milestone in December 2023
Conclusion:
Bajaj Auto‘s bold move to undertake a share buyback at an attractive premium reflects confidence in its financial position and growth prospects. Investors and industry watchers will keenly observe the market response in the coming weeks.
Also Read: Titan Company’s Strong Q3 Performance Propels Shares to 52-Week High
Disclaimer:
CurrencyVeda provides this news article for informational purposes only. We do not offer investment advice or recommendations. Before making any investment decisions, please conduct thorough research, consult with financial experts, and carefully consider your financial situation, risk tolerance, and investment goals. Investing in the stock market carries risks, and it’s essential to make informed choices based on your individual circumstances. CurrencyVeda is not liable for any actions taken based on the information provided in this article.
