Bajaj Auto has made a bold strategic move by pricing its ₹4,000 crore buyback plan at ₹10,000 per share, defying conventional market trends where premiums typically range between 25-30% above the prevailing price. This decision, involving the acquisition of approximately four million shares, goes beyond financial considerations; it is a testament to the company’s confidence in its robust performance and optimistic business outlook, as highlighted by the Chief Financial Officer, Dinesh Thapar, in an interview with CNBC-TV18.
The buyback price of ₹10,000 per share represents a substantial premium of 43% over the last closing price of ₹6,985.10. The proposed buyback, subject to shareholder approval, accounts for about 16% of the company’s paid-up share capital and free reserves, with the process expected to conclude by mid-February.
Thapar explained that the decision to set the buyback price at this level was an opportunity to reflect on Bajaj Auto’s compelling performance in the market, particularly in the two-wheeler segment. Overcoming challenges, the company has demonstrated resilience and is currently experiencing a resurgence in market demand and affordability. Bajaj Auto’s strategic focus on segments like the 125cc motorcycles has resulted in market share gains and a leading position. The recent addition of Triumph to the portfolio is anticipated to further boost the premium motorcycle business, doubling it in the short term and expanding export opportunities. Thapar also highlighted the revamp of the three-wheeler segment, opening new avenues for growth and innovation.