NEW DELHI: The Board of Bajaj Auto has approved a Rs 4,000 crore share buyback at Rs 10,000 apiece, the company said in a regulatory filing. This is at a premium of 43% to the last closing price. Bajaj Auto shares closed at Rs 6,980 on Monday, nearly flat from the previous session close.
The two-wheeler and three-wheeler major said they will buy 40 lakh shares via tender route, representing 1.41% of the company’s outstanding shares. The Promoters of Bajaj Auto, the Bajaj Family which currently holds a 54.94% stake in the company, will also participate in the buyback.
“In terms of Regulation 5(via) of the Buyback Regulations, the Board / Buyback committee may, till one working day prior to the record date, increase the Buyback price and decrease the number of Equity Shares proposed to be bought back, such that there is no change in the Buyback Size,” said Bajaj Auto. The Board of Bajaj Auto has constituted a Buyback Committee to look after the scheme. The Buyback is subject to the approval of the shareholders by a special resolution through a postal ballot.This is the second time in recent years that Bajaj Auto will be launching a buyback. Bajaj Auto had previously announced a share buyback worth Rs 2,500 crore in June 2022 at Rs 4,600 per share.
Bajaj Auto CEO Rajiv Bajaj had recently said that this buyback would be larger in size given higher cash on books. “We will close this year with Rs 20,000 crore cash. Whenever cash on books crosses Rs 15,000 crore, we look to give back over 70% to investors,” said Bajaj.Its shares have been in high demand for past one year on account of improving domestic and global market prospects. The shares surged 88% in 2023, the second-best performer, only after Tata Motors, on the Nifty 50 index.