Bajaj Auto Buyback 2022

Founded by Jamnalal Bajaj, a freedom fighter, philanthropist and a close confidant of Mahatma Gandhi, the Bajaj Group, is one of the most respected and renowned business houses of India. The journey started eighty years back with a sugar factory in Lakhimpur Kheri, Uttar Pradesh. With growth as the ultimate vision, the group has diversified into a variety of business areas.

With more than 18 million motorcycles sold in over 70 countries, the Bajaj brand is truly ‘The World’s Favourite Indian’. It is India’s No.1 motorcycle exporter with two out of three bikes sold internationally carrying a Bajaj badge. The company is also the world’s largest manufacturer of three-wheelers. Bajaj Auto is the first two-wheeler and three-wheeler company in the world to have reached a market capitalisation of INR one trillion and continues to be the world’s most valuable two and three-wheeler company.

Buy Back Offer Deal:

Buyback Type: Open Market
Buyback Offer Amount: ₹ 2500 Cr.
Date of Board Meeting approving the proposal: Jun 14 2022
Date of Public Announcement: Jun 14 2022
Buyback Offer Size: 9.61%
Buyback Number of Shares: 54,34,782
FV: 10
Buyback Price: ₹ 4600 Per Equity Share

Details of Buyback:

BAJAJ AUTO LTD. board of directors of the company at its meeting held on i.e. 27.06.2022 considered and approved the proposal for buyback of fully paid-up Equity Shares of the face value of Rs.10/-  not exceeding 54,34,782 Equity Shares (representing 9.61% of the total number of equity shares in the paid-up equity share capital of the Company) for an aggregate amount of Rs.2500 Cr Only, of the total paid-up equity share capital and free reserves of the company as on March 31, 2021 at a price of Rs.4600  on " Open Market Basis"

Salient financial parameters:

Particulars (in Cr) Mar 2018 Mar 2019 Mar 2020 Mar 2021 Mar 2022
Sales 25,210 30,358 29,919 27,741 33,145
Expenses 20,364 25,160 24,809 22,803 27,895
Operating Profit 4,846 5,198 5,109 4,938 5,250
OPM % 19% 17% 17% 18% 16%
Other Income 1,404 2,028 1,832 1,570 2,680
Interest 1 4 3 7 9
Depreciation 315 266 246 259 270
Profit before tax 5,933 6,956 6,692 6,241 7,652
Tax % 29% 29% 22% 22% 19%
Net Profit 4,219 4,928 5,212 4,857 6,166
EPS in Rs 145.8 170.29 180.11 167.85 213.08
Source: Screener

How to Participate in buyback?

In this method of share Buyback, the company will be purchasing stocks from existing shareholders of the company directly from the market. Example: “Bajaj Auto ” announces buyback plan of its shares up to value of Rs 4600, it means that the company will be purchasing shares of "Bajaj Auto " from the open market at a price not exceeding Rs.4600 per share. Scenario 1- If the share price is below Rs. 4600 in that case, the company will put buy order at Current Market Price and purchase shares. Scenario 2- If the share price is above Rs. 4600, in that case, the company will put buy order at Rs. 4600 only and if someone is ready to sell at Rs.4600 or less then only company will get back shares.

Profit from the buyback on the bases of acceptance Ratio:

No arbitrage is available.

Recommendation:

No arbitrage is available.

12 Comments

    Bajaj Auto approved share buyback of up to ₹2,500 crore at a price not exceeding ₹4,600 per share, via open market.

      Board Meeting is scheduled on 27/6/2022 to consider the proposal for the buyback of the shares.

    Please consider it cancelled. A big Dhoka to investors… Was not expected by Bajaj..
    Loosing face..

    Breaking News

    Bajaj-Auto deferred the Proposal of Buyback, No dates announced for future.

      First HGS and now Bajaj auto both used the event of buyback .slowly it will become common and buyback will loose attraction.

    As on 31.03.2022, Bajaj Auto has cash of 958 Crores on books.

      Does that mean size of the buyback would be too small? compared to market cap having 1 lakh crore!

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