Bajaj Auto buyback to shut as we speak: Do you have to tender shares in Rs 5,633 crore buyback? This is what analysts say
The 2-wheeler main launched its share buyback on July 1 because it aimed to buyback 46.94 lakh shares or 1.68% of the entire paid-up share capital, with the report date being mounted on June 24.
Key issues to find out about Bajaj Auto’s buyback
Beneath Bajaj Auto’s buyback provide, eligible shareholders (those that held the shares as on the report date) within the reserved class for small shareholders are entitled to tender 17 fairness shares for each 61 fairness shares held as on the report date (June 24). For shareholders within the normal class, the buyback entitlement is mounted at 17 fairness shares for each 525 fairness shares held on the report date.
A buyback of shares refers to a company motion the place an organization repurchases its personal shares from present shareholders. Normally, the corporate purchases the shares at the next worth than present ranges, encouraging traders to take part. Notably, Bajaj Auto has stated that its promoters and promoter teams have indicated their intention to not take part within the buyback.
Tips on how to take part in Bajaj Auto’s buyback?
Eligible Bajaj Auto shareholders can take part within the provide by putting a bid via a inventory dealer registered with both the BSE or the NSE through a separate window on the inventory exchanges. The registrar will full the verification of tendered shares by July 10, 2026. Thereafter, the ultimate acceptance or rejection of shares tendered underneath the buyback might be communicated to the inventory exchanges by July 13.
After the buyback, Bajaj Auto will return the unaccepted shares by July 14, as per the schedule shared by the 2 wheeler maker in its alternate submitting. “The Buyback reinforces the Firm’s dedication to its shareholders by returning surplus money to them in an efficient and environment friendly method, and is predicted to enhance its earnings per share and return on fairness,” it added.
Additionally learn: Bajaj Auto buyback opens July 1; shareholders can tender shares until July 7
How a lot revenue are you able to make from Bajaj Auto’s buyback?
For instance, let’s take an investor who purchased 20 shares of Bajaj Auto at 9,750 apiece earlier than the report date and is planning to tender shares within the buyback. The overall worth of her shareholding within the two-wheeler main as of the report date stood at Rs 1,95,000, making her eligible for Bajaj Auto’s reserved class for small shareholders (lower than Rs 2 lakh).
As per the entitlement ratio, she is entitled to tender round 6 shares out of her 20 inventory holding (almost 27.9%). You will need to be aware that not all shares she tenders could also be accepted within the buyback course of.
Every accepted share would fetch ₹12,000, leading to a revenue of ₹2,250 per share over the assumed buy worth.Additionally learn: Bajaj Auto’s Rs 5,633 crore share buyback | Key issues to know
Do you have to take part in Bajaj Auto’s buyback?
All shareholders who held Bajaj Auto shares of their demat accounts as of the report date (June 24) might be eligible to tender shares within the buyback. Sunny Agrawal, Head of Basic Analysis at SBI Securities, defined that the entitlement ratio for small shareholders stands at 27.9% (17 shares for each 61 shares held) with the report date worth of Rs 9,750 apiece.
“Assuming an acceptance ratio between 45% and 65%, a small shareholder is prone to get a return of 9.5% to 14.9% on his complete holding. The return potential will be greater if the acceptance ratio is greater or the inventory appreciates above Rs 9,750,” he stated, advising traders to take part within the buyback.
Harshal Dasani, Enterprise Head at INVasset PMS, additionally stated that the reserved-category mechanics make participation a worthwhile arithmetic train even on a post-tax foundation for retail shareholders already holding the inventory. “Retail shareholders (holdings as much as Rs 2 lakh worth) sit in a reserved 15% pool of seven.04 lakh shares value Rs 845 crore, and traditionally Bajaj Auto’s 2024 buyback delivered last retail acceptance ratios close to 26%. If an analogous acceptance sample holds, a retail shareholder tendering all eligible shares can anticipate roughly 25-26% of holdings to be accepted on the Rs 12,000 worth, with the residual returning at market worth,” he stated.
Vaqarjaved Khan, Senior Analyst of Basic at Angel One, in the meantime highlighted that with only one.68% of fairness being repurchased, the theoretical entitlement ratio works out to simply 4.5–5%.
“Meaning most retail shareholders will see solely a small slice of their tendered shares accepted, with the remaining bought again at prevailing market worth. The efficient blended acquire is much decrease than the headline premium implies. Nonetheless, tendering prices nothing and any acceptance is pure upside so shareholders ought to tender their full entitlement whatever the ratio,” he added.
Additionally learn: Bajaj Auto complete gross sales improve 28% in June
(Disclaimer: Suggestions, strategies, views and opinions given by the specialists are their very own. These don’t signify the views of The Financial Instances)
