Bajaj Auto Announces Rs 2,500-Crore Share Buyback
The Bajaj Auto board has approved a share buyback at a price not exceeding Rs 4,600 apiece.
Bajaj Auto Ltd. has approved a buyback of up to Rs 2,500 crore, days after deferring decision on its share repurchase that caused its stock to swing.
The board of directors at its meeting held on June 27 has approved the buyback at a price not exceeding Rs 4,600 apiece, via the open market, according to an exchange filing. The buyback represents 9.61% of the total paid-up share capital.
On June 15, the company deferred the proposal saying more deliberations are required. The move prompted UBS to lower its domestic growth and export assumptions for the Pune-based automaker.
Bajaj Auto on Monday said the share buyback is for existing shareholders, except promoters, promoter groups and persons in control of the company.
Here’s how the buyback will work:
If the market price is equal to or less than the maximum buyback price of Rs 4,600 apiece, the company will repurchase up to 54,34,782 equity shares, comprising about 1.88% of the paid-up share capital of the company as of June 27.
If the price falls below the maximum buyback price, the actual number of equity shares bought back could be higher but won't exceed the total cost of Rs 2,500 crore, it said.
The company would buy at least shares worth Rs 1,250 crore, or 50% of the total buyback. At the maximum buyback price, that means it would repurchase at least 27,17,392 equity shares.
As on March 2022, Bajaj Auto’s surplus cash and cash equivalents stood at Rs 19,090 crore against Rs 17,689 crore a year ago, after a dividend payout of Rs 4,051 crore.