40 lakh shares with a face value of Rs. 10 each could be repurchased by Bajaj Auto for a maximum of Rs. 4,000 crore at a price of Rs. 10,000 each. The Chakan, Pune-based corporation has repurchased stock twice in as many years.

It is the second time in as many years that the automaker has repurchased shares through a tender offer, with the board of Bajaj Auto Ltd. authorizing a Rs 4,000-crore buyback.

According to an exchange filing on Monday, the Chakan, Pune-based company intends to repurchase 40 lakh fully paid-up equity shares with a face value of Rs 10 each for Rs 10,000 apiece, for a total of Rs 4,000 crore.

The buyback represents 1.41% of the company’s total equity shares in volume terms. As of March 31, 2023, it comprises 16.33% and 14.49%, respectively, of the total paid-up equity share capital and free reserves.

Elara Capital’s Jay Kale stated, “The buyback amount is really good, at a 30% premium to the current market price, but the overall impact on earnings per share seems to be on the higher side.”

In a WhatsApp text to NDTV Profit, seasoned investor Deven Choksey expressed his approval of the repurchase as well, citing the promoter shareholding of the business. The exchange filing for Bajaj Auto indicated that the public controlled 21.18% of the company, with the promoters owning 54.94% of the company. 15%, 8.47%, and 15% of the equity were held by foreign investors, mutual funds, and insurers, respectively.

Undoubtedly, Bajaj Auto has carried out two similar share buybacks in the previous few years. The corporation repurchased shares valued at Rs 2,500 crore at a price of Rs 4,600 each in July 2022. The open market method was used to complete the repurchase.

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On Monday, even as the benchmark Sensex closed the day 0.93% lower at 71,355.22 points, Bajaj Auto’s shares increased 0.25% to Rs 6985.70 apiece on the Sensex.