Bajaj Auto hits 52-week high on nod to ₹4,000 cr share buyback plan

Two-wheeler manufacturer Bajaj Auto's shares hit a one-year high in the early trade today after the company announced a share buyback programme worth ₹4,000 crore.

Bajaj Auto shares opened a gap up and surged to an intra-day high of ₹7,420 before settling at ₹7,420.5 on the BSE. At the current share price of ₹7,145, the stock is trading about 52.5% up from a one-year low of ₹3,522 on January 12, 2023.

Bajaj Auto's board after market hours on Monday approved the proposal for buy-back of up to 4,000,000 fully paid-up shares of face value of ₹10 each, which is about 1.41% of its total shares at ₹10,000 apiece, thereby suggesting 43.14% premium over the set buyback price.

The share buyback worth ₹4,000 crores is subject to the approval of the shareholders by means of a special resolution through a postal ballot, says the company.

Promoter and promoter group holding in the two-wheeler major stands at 54.94%, 21% stake is held by public, corporate, and the rest by Indian financial institutions, banks or mutual funds, foreign institutions, and foreign institutional investors (FIIs).

The buyback represents 16.33% and 14.49% of the total paid-up equity share capital and free reserves (including securities premium account) of the company as of March 31, 2023.

Bajaj Auto's board has also formed a buyback committee to do all acts, deeds, matters and things related to the buyback.

Before this, Bajaj Auto had executed a share buyback worth ₹2,500 crore in July 2022 after buying shares at ₹4,600.

In the past year, Bajaj Auto's share price has almost doubled (up 96.09%), while the scrip recorded a 44.96% rise in the past six months. On a one-month and past-week basis, the auto major share has surged 15.66% and 6.86%, respectively.

In December 2023, Bajaj Auto sold 3,26,806 vehicles, a YoY increase of 16% from 2,81,514 in December 2022. The domestic sales stood at 1,90,919, while exports accounted for 1,35,887 units, both surging by 28% and 2%, respectively. The company saw the highest increase in commercial vehicle sales at 41% YoY, followed by domestic two-wheeler sales at 26%.

In the April-December 2023 period, the company's overall sales increased 7% to 32.8 lakh against 30.6 lakh in the same period a year ago. Domestic commercial vehicles accounted for the highest increase in sales at 76% YoY, while domestic two-wheeler sales surged 22% during April-December 2023.

The company had recorded a 20% increase in year-on-year (YoY) profit to ₹1,836 crore in the July to September quarter against ₹1,530 crore in the same period last year. The revenue from operations stood at ₹10,777 crore, up 6%, as against ₹10,203 crore in the corresponding period of the previous year.