Jobaaj Stories
Indian automobile manufacturer Bajaj Auto announced yesterday that its Board had approved a share buyback proposal aggregating to a total of Rs 2,500 crores.
The buyback amounts to 9.6% of the company's total paid-up share capital with the price of the buyback decided as not exceeding Rs 4,600 per share.
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The amount represents 8.7% of the company's free reserves including securities premium. The issue is not available to promoters, promoter groups, and persons in control of the company. It is only applicable to existing shareholders and the buyback is set to be carried out in the open market through the stock exchange mechanism.
The company said it will utilize at least 50% of the amount earmarked as the maximum buyback size i.e. Rs 1,250 crores and that based on the minimum buyback size and maximum buyback price, the company would purchase a minimum of 27,17,392 shares.
“We wish to inform you that the board of directors of the company (Board) at its meeting held today has approved the proposal for buyback of the fully paid-up equity shares of the company having a face value of ₹10/- each from the existing shareholders of the company from open market through stock exchange mechanism at a price not exceeding ₹4,600/- per equity share and such aggregate amount, up to ₹2,500 crore, representing 9.61 % and 8.71% of the aggregate of the total paid-up share capital and free reserves of the company," the company said in an exchange filing.
Moreover, a buyback committee has been established by the company and all relevant rights and powers have been delegated to the committee to carry out any actions it may deem necessary for the buyback.
Even though global indices have declined significantly this year, Bajaj Auto's stock has shown robust growth during the year. The stock closed at Rs 3,861.20 per share yesterday, up 18.8% since the beginning of the year.
Article by Aman Agarwal.
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