Bajaj Auto is planning a ₹4,000-crore share buyback program set to commence on March 6. Its managing director has even provided an estimate a fair value for the company’s stock.

Details Of Buyback: The Bajaj Group company intends to repurchase 40 lakh shares with a face value of ₹10 each, representing approximately 1.41% of the total outstanding shares, at a price of ₹10,000 per share.

Announced in January 2024, the buyback plan will be executed through the tender offer route and on a proportionate basis.

The buyback period will extend until March 13, offering shareholders the opportunity to tender their shares. This buyback price stands at a significant premium to the current market levels of ₹8,350.

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Verification of tender forms by the registrar is scheduled to conclude by March 18, with bids settled on the bourses by March 20. The equity shares repurchased will be extinguished by March 26.

Bang For Buck: Bajaj Auto has also announced the entitlement ratio for the buyback, indicating the acceptance ratio for general, institutional and retail investors.

For the general and institutional categories, Bajaj Auto will buy back one equity share for every 82 equity shares held on the record date, resulting in a 1.22% acceptance rate. Retail investors will see an entitlement ratio of seven equity shares for every 27 equity shares held, translating to a 25.9% acceptance rate.

Bajaj Auto’s Managing Director, Rajiv Bajaj, said in an interview with CNBC-TV18 that he was confident in the company’s stock, suggesting a fair value of ₹12,000.

He highlighted the firm’s strong performance across its business segments. Ahead of the share buyback, Bajaj mentioned the tremendous response the buyback has received. He also said that the company will launch a CNG bike within the next quarter.

Bajaj Auto shares have rallied 123% in the last year, and it was the second-best performing stock on the Nifty 50 index, registering gains of 88% last year.

Price Action: Bajaj Auto’s share price cruised 1.74% higher to ₹8,350 in afternoon trade on Tuesday.

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