In a recent development, Bajaj Auto Ltd’s board has given the green light to a substantial share buyback amounting to Rs 4,000 crores. The buyback is set at a price of Rs 10,000 per share, marking a premium of 43 percent over the last closing price.
Key Details of the Bajaj Auto Buyback
- The buyback involves the purchase of 40 lakh shares through the tender route.
- This represents approximately 1.41 percent of Bajaj Auto’s outstanding shares.
- Notably, the promoters of the company, holding a current stake of 54.94 percent, will also participate in the buyback.
Board’s Delegation and Buyback Committee
The Board has formed a dedicated Buyback Committee, empowering it to take necessary actions and decisions related to the buyback at its absolute discretion.
Shareholder Approval and Further Details
The proposed buyback is contingent upon receiving shareholder approval through a special resolution, which will be sought via a postal ballot. The specific record dates and additional details pertaining to the buyback will be disclosed at a later stage.
Repeat Performance: Second Buyback in Two Years
This marks Bajaj Auto’s second share buyback within a span of two years. In July 2022, the automotive major conducted a share buyback, purchasing shares worth Rs 2,500 crores at Rs 4,600 per unit. Managing Director Rajiv Bajaj hinted last week in an interview with CNBC-TV18 that this buyback would be significantly larger than the previous one.
Strategic Significance
Share buybacks are often seen as strategic moves by companies to return excess cash to shareholders, signaling confidence in the company’s financial health. It can also be viewed as an effort to enhance shareholder value and boost the stock price.
As the buyback progresses, shareholders and industry observers will be keenly watching for further developments and the impact on Bajaj Auto’s market dynamics.
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