Bajaj Auto announces buyback at steep premium

Key points related to the buyback are –

  • 4,00,000 equity shares, representing 1.41% of the total shares would be bought back at Rs 10,000/ share i.e, Rs 4,000 crore of total consideration (excluding the associated costs and fees).
    • Company may later decide to increase the buyback price without increasing the total consideration amount of Rs 4,000 cr. (If this happens, number of shares bought back would reduce)
  • Rs 10,000/ share is 43% premium to the prevailing market price
    • Current market price has already increased by 93% in the last one year
  • Promoter group which currently holds 54.95% of the Company has not specifically denounced it’s right to tender under the buyback and hence will very likely participate proportionately.

Bajaj Auto was written off not very long back. The fortunes have changed significantly in the last couple of years.

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