What Is The Record Date for the Bajaj Auto Buyback?
Bajaj Auto, one of India’s leading two-wheeler manufacturers, has recently announced a significant move to buy back shares from its existing shareholders, setting the stage for a deeper understanding of shareholder value and corporate strategy. This announcement has garnered attention from investors and market analysts alike, raising questions about the record date, the buyback details, its significance, and the financial health of the company.
Also Read: How to Get Back Money Wrongly Transferred via UPI?
Contents
What is the Record Date for the Bajaj Auto Buyback?
The record date for Bajaj Auto’s ₹4,000 crore buyback offer has been fixed as February 29, 2024. This data is crucial for shareholders as it determines their eligibility to participate in the buyback process. Shareholders who own shares of Bajaj Auto as of this date will be eligible to sell back their shares to the company under the terms of the buyback offer.
Bajaj Auto Buyback Details
Under the announced buyback scheme, Bajaj Auto plans to repurchase 40 lakh (4 million) fully paid-up equity shares at a price of ₹10,000 per share. The total expenditure for this buyback will not exceed ₹4,000 crore, reflecting a significant return of value to its shareholders. The buyback price represents a premium over the current market valuation, indicating the company’s confidence in its intrinsic value and future growth prospects.
What is the Significance of Bajaj Auto Buyback Record Date?
The record date is a fundamental concept in corporate finance, serving as the cut-off for shareholders to be eligible for certain corporate actions, including buybacks, dividends, and bonus shares. For Bajaj Auto’s shareholders, the record date of February 29, 2024, is significant because it confirms their eligibility to participate in the lucrative buyback offer, potentially leading to a premium on their investment depending on the share price at the time of the buyback.
How is the Financial Performance of Bajaj Auto?
Bajaj Auto’s financial performance in the recent past has been impressive, showcasing robust growth and profitability. For the third quarter ended December 2023, the company reported a year-on-year (YoY) growth of 37% in its standalone net profit, amounting to ₹2,042 crore, surpassing analyst expectations. Revenue from operations saw a 30% YoY increase to ₹12,114 crore, driven by strong domestic sales and strategic market activations during the festive season. Despite challenges in export markets, the company achieved its highest-ever quarterly EBITDA of ₹2,430 crore, with margins improving by 100 basis points to 20.1%.
Following the buyback announcement, Bajaj Auto’s shares witnessed a positive surge, ending up 2.7% on the NSE at ₹8,344, and reaching a 52-week high of ₹8,455.45. This performance underscores the market’s positive reception to the buyback and reflects investor confidence in the company’s financial health and growth prospects.
What are Analyst Ratings?
Despite the strong financial performance and positive market response, analyst opinions on Bajaj Auto’s stock have been mixed. Kotak Institutional Equities maintained a ‘Sell’ rating, citing the stock as expensive at current valuations with a target price of ₹5,000. Conversely, Nuvama reiterated a ‘Hold’ view with a revised target price of ₹6,850, suggesting that while Bajaj Auto’s performance is commendable, most positive aspects seem already factored into the current market price.
| Analyst Firm | Rating | Target Price (₹) | Commentary |
|---|---|---|---|
| Kotak Institutional Equities | Sell | 5,000 | The firm considers the stock expensive at current valuations, suggesting that the market has already priced in most of the positives. |
| Nuvama | Hold | 6,850 | Maintains a ‘Hold’ view but revised the target price upwards from ₹6,700, indicating a cautious optimism based on the company’s recent performance. |
Conclusion
The announcement of Bajaj Auto’s share buyback plan, coupled with its record date, has sparked significant interest among investors and market observers. The move not only highlights the company’s commitment to returning value to its shareholders but also reflects its confidence in sustained financial health and growth. As the record date approaches, shareholders and potential investors will keenly watch the market’s response, alongside the company’s continuing performance and strategic initiatives in a dynamic global market.
