Bajaj Auto shares: witnessed a significant upswing in its shares during Wednesday’s trading session, reaching a peak not seen in the past year. The stock experienced a robust surge of 5.96%, soaring to a 52-week high at Rs 7,059.75 from its previous closing at Rs 6,662.50.
The motorcycle manufacturer, as indicated in a filing with the Bombay Stock Exchange (BSE), has disclosed its contemplation of a buyback proposal for equity shares.
In an official communication, Bajaj Auto has disclosed its upcoming board meeting scheduled for Monday, January 8, 2024. The agenda for this meeting includes a pivotal discussion on the proposal for the buyback of fully paid-up equity shares, along with other matters deemed necessary and incidental.
The company asserts its commitment to ensuring adherence to the provisions outlined in the Companies Act, 2013, including its associated rules and regulations, the Securities and Exchange Board of India (Buy-back of Securities) Regulations, 2018, as amended, and any other pertinent laws.
This strategic move by Bajaj Auto to contemplate a buyback reflects the company’s proactive stance in navigating the financial landscape. The decision aligns with regulatory frameworks and signals a commitment to shareholders, fostering confidence in the company’s growth trajectory.
The board’s consideration of this proposal underscores Bajaj Auto’s dedication to optimizing its capital structure and enhancing shareholder value.
According to an analyst’s projection, the upcoming buyback from Bajaj Auto is anticipated to surpass its previous size.
In the prior buyback, the company undertook a repurchase valued at Rs 2,500 crore, utilizing the open market through the stock exchange mechanism at a rate of Rs 4,600 per share as the buyback price.
Offering insights into the potential magnitude of the new buyback, Prashanth Tapse, Senior VP (Research) at Mehta Equities, suggests that, considering the current share price of Rs 6,950, a larger buyback size could place the expected repurchase price in the range of Rs 7,800 to Rs 8,000.
This speculation reflects the analyst’s assessment of the market dynamics and the potential impact of the proposed buyback on the company’s stock value.
In December 2023, the company reported sales of 326,806 units, marking an increase from 281,514 units during the same period the previous year.
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