Bajaj Auto shares gain over 2% on ₹4,000-crore buyback announcement

Shares of Bajaj Auto Ltd rallied more than 2% on Tuesday, a day after the automaker announced its buyback proposal worth ₹4,000 crore.

Bajaj Auto's board has approved the buyback of 40 lakh shares and the company is buying these stocks at a significant premium. The company is buying back the shares at a price of ₹10,000 per unit, nearly 22% higher than its Monday’s closing price of ₹8,207.3 apiece.

The share buyback, which will be done through the tender offer route and on a proportionate basis, will open on March 6 and close on March 13. The bids will be settled on the stock exchange by March 20.

The share buyback plan was announced in January this year.

Bajaj Auto is looking to buy back up to 40,00,000 fully paid-up equity shares, representing 1.41% of the equity shares of the company, each with a face value of ₹10.

The stock jumped 2.2% to hit the day's high at ₹8,388 apiece on the NSE during the opening hour of the session. The stock of the two-wheeler giant, however, eased some of its gains to close at ₹8,350 apiece, up by 2.2% on NSE.

The two-wheeler maker has announced the tender route buyback timelines and acceptance ratio, with the final entitlement ratio for general, institutional acceptance.

The company has set the record date for the buyback offer as February 29, 2024.

The reserved category for small shareholders entails an allocation of 7 shares for every 27 shares held on the record date, while other eligible shareholders in the general category will get one share for every 82 shares held on the record date.