Bajaj Auto buyback: Board to consider proposal on June 14; what brokerages say on stock?

Bajaj Auto is mulling to consider a buyback of fully paid-up equity shares, the company said in a regulatory filing on Thursday, June 9, 2022. The meeting of the Board of Directors of the auto major will be held on Tuesday (June 14) to take final call on the proposed proposal. The company last announced a buyback in 2000.  

"This is to inform you that the meeting of Board of Directors of the Company is scheduled to be held on Tuesday, 14 June 2022, inter-alia to consider a proposal for buyback of fully paid-up equity shares of the Company in accordance with the Securities and Exchange Board of India (Buy-back of Securities) Regulations, 2018," read the regulatory filing by the company.  

A share buyback is a corporate action by a company to buy back its own outstanding shares from its existing shareholders usually at a premium to the prevailing market price. Share buybacks are planned to reduce the number of shares in circulation, hence increasing the share value and the earnings per share (EPS). 

Meanwhile, It also informed that the trading window for dealing in the securities of the Company will be closed from June 9-16 (both days inclusive), for the designated persons as per the Company's Code of Conduct framed pursuant to SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended. 

Meanwhile, reacting to buyback news, shares of Bajaj Auto gained over one per cent in Friday's intraday trade to Rs 3965.75 per share on the BSE. 

What global brokerages say on Bajaj Auto 

Earlier, global brokerages also came out with a report on Bajaj Auto on June 9.  

Morgan Stanley maintained an 'equal weight' rating on Bajaj Auto with a target price of Rs 4182. It translates into an upside of nearly eight per cent (7.89%) on the previous closing price of Rs 3876.90 per share.  

Global brokerage firm Credi Suisse, which retained neutral rating on two-wheeler manufacturer, sees a target price of Rs 4030.