Bajaj Auto to buy back shares worth ₹2,500 cr

The board of directors of Bajaj Auto has approved a proposal to buy back fully paid up equity shares of the company aggregating up to ₹2,500 crore.

“...the Board of Directors… 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 (except promoters, promoter group and persons in control of the company) from open market through stock exchange mechanism at a price not exceeding ₹4,600 (maximum buyback price) per equity share and such aggregate amount, up to ₹2,500 crore (maximum buyback size),” Bajaj Auto states in a regulatory filing.

The maximum buyback price and the maximum buyback size represent 9.61 % and 8.71% of the aggregate of the total paid-up share capital and free reserves (including securities premium account), respectively, the auto major further adds.

As per the pre-buyback shareholding pattern, 15 banks hold 0.10% stake in Bajaj Auto, whereas mutual funds and insurance companies hold 4.60% and 8.55% stake, respectively, with a combined shareholding of 13.25%. Foreign institutional investors and foreign portfolio investors hold 11.03% stake in the auto manufacturer, while NRIs and DRs hold 0.68% and 0.01% stake in the company, jointly representing 11.72% stake. The Indian public and corporate hold 21.26% stake in the company. The remaining 53.77% shares are held by promoter and promoter group.

The indicative maximum number of equity shares proposed to be bought back, would be 5,434,782 equity shares, subject to the market price of the equity shares being equal to or less than the maximum buyback price. This will comprise 1.88% of the paid-up share capital of the company as of June 27, 2022, Monday.

“If the equity shares are bought back at a price below the maximum buyback price, the actual number of equity shares to be bought back could exceed the proposed buyback shares, but will always be subject to the maximum buyback size,” Bajaj Auto clarifies.

The company will utilise at least 50% of the amount earmarked as the maximum buyback size for the buyback — ₹1,250 crore (minimum buyback size). Based on the minimum buyback size and maximum buyback price, the company would purchase a minimum of 2,717,392 equity shares, Bajaj Auto further adds.

“Further, since the buyback is from the open market, the details of the actual number of equity shares that would be bought back (including as a percentage of the existing paid-up capital) and the post buyback shareholding pattern cannot be ascertained at this stage,” Bajaj Auto says.” The same will be provided upon completion of the buyback.”