Bajaj Auto Announces Share Buyback, Targeting ₹4,000 Crore: Opens on March 6, Closes on March 13.
In the latest development from Bajaj Auto, it has been announced that shareholders falling under the reserved category will be entitled to receive 7 shares for every 27 shares held on the record date for the upcoming buyback program. Conversely, shareholders categorized under the general category will have a buyback entitlement of 1 share for every 82 shares held on the record date. This move is part of Bajaj Auto’s strategy to allocate buyback shares based on shareholders’ respective holdings, aiming to optimize returns for investors across different categories.
The buyback entitlement for Bajaj Auto’s reserved category shareholders has been established at 7 shares for every 27 shares held on the record date. Meanwhile, for shareholders falling under the general category, the buyback entitlement stands at 1 share for every 82 shares held on the record date.
The board of directors of Bajaj Auto has officially set the record date for its buyback program on February 29, 2024. This significant move comes as the auto major declares its intention to repurchase shares through the tender route.
In an announcement, Bajaj Auto revealed that the buyback price is fixed at ₹10,000 per share. This price marks a substantial increase of approximately 24% from its closing price of ₹8,042.75 per share on Monday.
The company’s board has given the green light to buy back up to 40,00,000 fully paid-up equity shares with a face value of ₹10 each at a price of ₹10,000 per equity share. This buyback program is capped at an aggregate amount not exceeding ₹4,000 crore.
In terms of percentages, this buyback amounts to 16.33% of the total issued and fully paid-up equity share capital and 14.49% of the free reserves of the company. Additionally, it represents approximately 1.41% of the total issued and paid-up equity share capital of the company as of March 31, 2023.
Notably, Bajaj Auto’s promoters and promoter group have shown their intent to participate in the share buyback. They may tender up to an aggregate maximum of 18,75,657 equity shares. This participation underscores their confidence in the company’s prospects and further aligns their interests with those of other shareholders.
As of now, the promoters and promoter group collectively hold 54.94% of the total equity share capital of Bajaj Auto.
The buyback conducted by Bajaj Auto will follow a proportionate basis through the “Tender Offer” route. To facilitate the tendering of equity shares under the buyback program, the company will request the stock exchanges to provide the acquisition window. For this buyback, BSE (Bombay Stock Exchange) has been designated as the stock exchange.
In Monday’s trading session, Bajaj Auto shares closed 2.02% higher at ₹8,205.15 apiece on the BSE. This price movement reflects the market’s response to the upcoming buyback announcement and other relevant factors influencing the company’s stock performance.