Bajaj Auto to Consider Share Buyback on June 14; What Investors Should Know

Bajaj Auto will consider a buyback of its fully paid-up equity shares, said the company in a notification to the exchanges on Thursday. The company intimated to exchanges that the board of directors will consider a proposal to buyback shares in a meeting scheduled to be held on June 14.

“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,” the company said in an exchange filing.

Bajaj Auto added: “Further, the trading window for dealing in the securities of the Company is closed from 9 June 2022 to 16 June 2022 (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.”

A share buyback, also known as share repurchase, is a corporate action to buy back its own outstanding shares from its existing shareholders usually at a premium to the prevailing market price. It can be an alternative tax-efficient way to return money to shareholders. Share buybacks reduce the number of shares in circulation, which can increase the share value and the earnings per share (EPS).

The company last went for such a move in 2000, when shareholders approved the buyback of up to 18 million equity shares at a price of Rs 400 each.

Bajaj has paid dividends to shareholders since FY08, with the amount going up each year: from Rs 20 per share in FY08 to Rs 140 at the end of FY22. Its aggregate dividend payout during the same period has risen from Rs 289 crore to Rs 4,051 crore at the end of FY22.

Bajaj Auto: Stock Price History

The company’s stock is down 8.2 per cent in the last one year. It has gained 19.3 per cent year-to-date. Bajaj Auto shares closed at Rs 3,876.90 on the BSE on Thursday, up 2.21 per cent compared to Wednesday’s close.

Bajaj Auto: Q4 Results

Bajaj Auto reported lower-than-expected sales data for May. It reported, total sales of 2.75 lakh units for May. Sales volumes in the previous month grew merely 1 per cent on a year-on-year basis and were down more than 34 per cent from their pre-pandemic levels in May 2019.

The muted sales performance was led by a weak month for exports for the company. Two-wheeler exports slumped 15 per cent on-year to 1.53 lakh units, while three-wheeler exports fell 67 per cent to 10,163 on-year in May.

Bajaj Auto Ltd reported 10 per cent growth in net profit for the March 2022 quarter at Rs 1,469 crore as against Rs 1,332 crore in the corresponding quarter of the previous fiscal. The higher profit was mainly due to an exceptional item of Rs 315 crore accrued as incentive receivable from the Maharashtra government under an incentive scheme.

Revenue from operations, however, fell 7 per cent to Rs 7,975 crore for the period under review.

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