Bajaj Auto, India’s second largest two-wheeler manufacturer, will be spending a maximum of ₹2,500 crore for buying back its equity shares from the open market.

The Pune-based company will offer a maximum offer price of ₹4,600 per share for buying approximately 1.88 per cent of the paid-up share capital of the company as of June 27. The stock jumped 3.7 percent on the BSE after the announcement.

Committee formed

The company further informed that it has constituted a buyback committee for the purpose. The buyback scheme will be launched in due course, it said. “The company will utilise at least 50 per cent of the amount earmarked as the maximum buyback size, that is ₹1,250 crore (minimum buyback size). The company would purchase a minimum of 27,17,392 equity shares,” Bajaj Auto said in a statement.

If the 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.

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. The same will be provided upon completion of the buyback, Bajaj Auto added.

Shareholding pattern

As of June 24, the promoters held 53.77 per cent in the company while domestic financial institutions, banks and mutual funds controlled 13.25 per cent. Foreign investors held 11.72 per cent while public and corporates and others held 21.26 per cent. The last buyback done by the company was in 2000 when shareholders approved up to 1.8 crore equity share buyback at ₹400 per share.

As on March 31, 2022, surplus cash and cash equivalents with the company stood at ₹19,090 crore as against ₹17,689 crore in the year-ago period, after a dividend payout of ₹4,051 crore.