<p>Major two- and three-wheeler manufacturer Bajaj Auto Ltd.’s board authorized a Rs 4,000 crore share purchase at Rs 10,000 a share on January 8. This is at a 43% premium over the most recent closing price.</p>
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<p>Bajaj Auto shares ended Monday at Rs 6,985.70 on the BSE.</p>
<p>The two-wheeler manufacturer said in a filing to the BSE that its board had approved the proposal for Bajaj Auto to buy back up to 4,000,000 fully paid-up equity shares with a face value of Rs 10. This represents 1.41 percent of the company’s total equity shares at a price of Rs 10,000 per share, payable in cash for a total consideration not to exceed Rs 4,000 crore.</p>
<p>“The Bajaj Auto stock ought to respond favorably right away,” said Abhilash Pagaria, Head of Nuvama Alternative & Quantitative Research. In his base scenario, Pagaria projects a possible yield of 55–60 basis points at the present market price and general category (institutional) acceptance of 1.3%.</p>
<p>According to his first estimations, the retail sector may take between 4% and 10%. According to Pagaria, public acceptability may increase to 3% in the rare event that promoters opt-out, but retail acceptance would remain the same.</p>
<p>Although the buyback’s exact dates are yet unknown, Nuvama Alternative Research estimates that it will be completed in three to five months.</p>
<p>According to Bajaj Auto’s audited standalone financial statements and audited consolidated financial statements for the fiscal year that concluded on March 31, 2023, the share buyback accounted for 16.33 percent of the total paid-up equity share capital and 14.49 percent of free reserves (including securities premium account), respectively.</p>
<p>155,580,309 shares, or 54.94 percent of Bajaj Auto, were held by 64 promoter and promoter group shareholders as of this writing. The manufacturer of two- and three-wheelers, Bajaj Auto, was also significantly owned by insurance firms (3.21%) and mutual funds (5.35%) in addition to FPI, which had a 14.72 percent interest.</p>
<p>“The Board / Buyback Committee may, up to one working day prior to the record date, increase the buyback price and decrease the number of Equity Shares proposed to be bought back, so that there is no change in the buyback Size,” according to Bajaj Auto, in accordance with Regulation 5(via) of the Buyback Regulations.</p>
<p>The Bajaj Auto Board established a repurchase Committee and granted it the authority to carry out any actions, transactions, affairs, and things that it may, in its sole discretion, determine to be appropriate, necessary, or expedient in relation to the repurchase.</p>
<p>“The repurchase is contingent to shareholder approval via a special resolution and postal ballot. In compliance with the Buyback Regulations, Bajaj Auto said that the public notice and letter of offer outlining the procedure, deadlines, and other necessary information would be made available when appropriate.</p>
<p>Since the announcement of the repurchase, the stock has increased by over 5%. It has increased by more than 93% over the last year, ranking second on the index after Tata Motors.</p>
