Street rejoices Bajaj Auto’s Rs 4,000 crore share buyback; stock hits new all-time high

Bajaj Auto buyback: Bajaj Auto, the two-wheeler major, announced on Monday (January 8) a share buyback at a hefty premium of 43 per cent over the last traded price of Rs 10,000 per share. Following the development, the foreign brokerages are divided. While UBS has maintained its sell rating, Jefferies has reiterated its buy stance with a raised target price of Rs 8,400 in comparison to the earlier target of Rs 6,000 per share.

In the buyback, the company will put in Rs 4,000 crore. In the opening trade on Tuesday, January 9, 2024, the company’s shares traded higher by over 6 per cent and scaled to a fresh all-time high price of Rs 7,420 per share.

This is the second buyback by the company in two years. Earlier in 2022, the company came up with a Rs 2,500 crore share buyback, with the buyback price pegged at Rs 4,600.

Foreign brokerage UBS is of the view that in the new buyback offering, promoters will be participating, implying that the company will buy back around 1.41 per cent of the equity and promoters will then rake in Rs 2,200 crore. It further added that since the announcement of the buyback consideration, the stock has run up by around 6 per cent.