Today is the last day to buy Bajaj Auto shares for participating in the Rs 4,000 crore buyback offer. The record date to participate in the buyback is February 29. The buyback price is 18% higher than Tuesdays closing price of Rs 8,462 on BSE. The acceptance ratio in the retail category could be between 4% to 10%. The company has steady ROCE and stable revenue growth.
Deven Choksey says: Reliance in particular has always moved once in four years. If they moved in FY2020-21, I guess the time will be now for the stock to move up. Why is it once in four years? Every time this company takes money from investors and puts it into the capital expansion, after four years, the project gets completed and thereafter the reward time starts for this company.”
Bajaj Auto's buyback size represents 40 lakh shares or 1.41% of the total number of equity shares of the company. Currently, promoter and promoter group entities hold 54.94% stake in Bajaj Auto, and foreign institutional investors hold 14.72%.
The stock rose 6.21 per cent to hit a high of Rs 7,420, as the buyback price at Rs 10,000 crore was at 43.14 per cent premium to the stock's Monday's closing price of Rs 6,985.70.
A buyback is when a company purchases its own shares in the stock market from existing shareholders. It is the most tax-efficient way to reward shareholders.
This is the second time Bajaj Auto will be doing a share buyback if the board approves. In July 2022, Bajaj Auto launched a share buyback worth Rs 2,500 crore. The buyback was done at Rs 4,600 a share. Since the first share buyback, the share value of the automaker has more than doubled in value.