bajaj auto share price: Buyback boom! Bajaj Auto shares zoom 6% to all-time high

Shares of two-wheeler major Bajaj Auto on Tuesday rallied up to 6% to hit record high of Rs 7,420 on BSE after the company’s board approved a Rs 4,000-crore share buyback through the tender route.

Investors rejoiced as the buyback price of Rs 10,000 per share was at a 43% premium to Monday’s closing price. The general expectation on the Street was that the buyback would be done through the open market route like it was done last time but the tender offer route, too, came as a pleasant surprise.

The 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%.

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In July 2022, the two-wheeler maker had bought back shares worth Rs 2,500 crore. The buyback was then done at Rs 4,600 a share. Since the first share buyback, the share value of the automaker has more than doubled.

Calculations done by Nuvama show that in the base case scenario, acceptance in the general category (institutional) could be around 1.3%. For retail, the anticipated acceptance ranges between 4% to 10%.

If promoters opt-out, which is unlikely, general acceptance might rise to 3%, with retail acceptance unchanged, the brokerage said.Specific dates for the buyback remain pending, but Nuvama expects the process to be completed within 3-3.5 months from now.

In the near term, sentiments for the stock may remain positive as the buyback price is at a huge premium to prevailing prices, say analysts.

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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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