Bajaj Buyback: Bajaj Auto board has approved a buyback of Up To 2,500 Crore. Bajaj Auto offers to buy back 54,34,782 shares at up to Rs 4,600 per share. This represents 9.61 per cent and 8.71 per cent of the aggregate of the total paid-up share capital and free reserves (including securities premium account) of the Company.
The company in a BSE filing on Monday said: “We wish to inform you that the board of directors of the company (“board”) at its meeting held today i.e. Monday, 27 June 2022, has approved the proposal for buyback of the fully paid-up equity shares of the company having a face value of Rs. 10/- each (“Equity Shares”) from the existing shareholders of the company (except promoters, promoter group, and persons in control of the company) from the open market through the stock exchange mechanism at a price not exceeding Rs. 4,600/- per equity share.
“If the equity shares are bought back at a price below the maximum buyback price, the actual number of equity shares to be bought back could exceed the proposed buyback shares, but will always be subject to the maximum buyback size,” the automaker added.
The company said it will utilise at least 50 per cent of the amount earmarked as the maximum buyback size for the buyback i.e. Rs 1,250 crore and that is based on the minimum buyback size and maximum buyback price, the company would purchase a minimum of 27,17,392 equity shares.
Meanwhile, the company board has constituted a buyback committee and has delegated the power to do all such acts, deeds, matters, and things as it may, in its absolute discretion, deem necessary, expedient or proper in connection with the buyback, the company told BSE.
The auto major’s board earlier this month had deferred a decision on its proposed share buyback, and later decided to meet on Monday, June 27, 2022, to further deliberate on the proposal for the buyback of fully paid-up equity shares of the company.
Earlier, the company had on June 14 had said: “We wish to inform you that the board of directors of the company at its meeting held on June 14, decided that further deliberations are required in order to take a decision on the proposal of buyback, and accordingly deferred the matter,” it had said while postponing the buyback plan.
A share buyback, also known as a share repurchase, is a corporate action to buy back its own outstanding shares from its existing shareholders usually at a premium to the prevailing market price. It can be an alternative tax-efficient way to return money to shareholders. Share buybacks reduce the number of shares in circulation, which can increase the share value and the earnings per share (EPS).
Bajaj Auto shares were trading 0.7 per cent higher at Rs 3,840 apiece on the BSE in Monday’s afternoon deals.
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