Mumbai, January 8, 2024: In a move that sent its stock price soaring, Bajaj Auto, the iconic Indian two-wheeler giant, announced today its board’s approval of a massive Rs 4,000-crore share buyback program. This marks the second buyback in the company’s history, reflecting its strong financial position and confidence in future prospects.
The buyback will be conducted at a premium of 64% over the closing price of Rs 6,100 per share on Friday, offering a compelling opportunity for shareholders to exit their investments at a significant profit. The maximum buyback size of Rs 4,000 crore represents 4% of the paid-up share capital, with the company committing to utilize at least 50% of this amount, translating to a minimum purchase of 20 crore shares.
Analysts attribute this bold move to Bajaj Auto’s buoyant cash flow exceeding Rs 3,600 crore in the first half of FY24 and a healthy surplus of Rs 17,326 crore as of September 2023. Additionally, the company’s successful track record with its first buyback in 2022, which saw the stock price more than double in value, likely played a factor in the board’s decision.
“The buyback program underscores Bajaj Auto’s commitment to enhancing shareholder value,” said an elated company spokesperson. “It also demonstrates our confidence in the long-term growth potential of the Indian two-wheeler market and our ability to navigate the evolving landscape.”
Market experts predict that the news will further propel Bajaj Auto’s stock price, making it an attractive proposition for both existing and potential investors. The buyback is expected to commence after obtaining regulatory approvals and is likely to conclude within six months.
This move by Bajaj Auto is not only a boon for its shareholders but also sends a positive signal to the entire Indian auto industry. It signifies strong investor confidence in the sector’s resilience and future growth, potentially paving the way for similar moves by other automotive players.
Bajaj Auto’s bold buyback program marks a significant step forward in its journey towards sustained financial strength and shareholder value creation, solidifying its position as a leader in the Indian two-wheeler market. As the company gears up for its ambitious future plans, this strategic move sets the stage for an exciting chapter in its illustrious history.
