Bajaj Auto Ltd, one of the leading two-wheeler manufacturers in India, has approved a buyback of shares worth Rs 4,000 crore. The buyback will be conducted through the tender offer route. The company plans to repurchase up to 40,00,000 shares at a price not exceeding Rs 10,000 per share. This represents 1.41% of the company’s total equity shares.

The buyback price of Rs 10,000 per share is a significant premium compared to the current market price. This news has led to excitement among investors, with the stock market set to rejoice.

Bajaj Auto’s last share buyback was conducted in July 2022, when the company bought back shares worth Rs 2,500 crore at Rs 4,600 per share. Since then, the share value of the automaker has more than doubled.

Currently, promoter and promoter group entities hold 54.94% stake in Bajaj Auto, while foreign institutional investors hold 14.72%.

This buyback is expected to further enhance shareholder value and instill confidence in the market. It will provide an opportunity for existing shareholders to exit at a premium price and reduce the equity base of the company.

The buyback announcement has led to a surge in Bajaj Auto’s stock price. Last week, the stock scaled a lifetime high of Rs 7,084. On Monday, it closed at Rs 6,983.85, up 0.1% from the previous close.

This is an opportune time for Bajaj Auto to conduct a share buyback, given the strong performance of the company and positive market sentiment towards the stock.

It is important to note that this is the second time Bajaj Auto will be conducting a share repurchase program. The last share buyback was done through the open market, while this time it will be through the tender offer route.

Overall, the buyback of shares by Bajaj Auto is expected to have a positive impact on the company’s stock price and investor sentiment. It reflects the company’s confidence in its financial position and long-term prospects.