- 10 Jun 2022
- ICICIdirect Research
BAJAJ AUTO BOARD TO CONSIDER SHARE BUYBACK PROPOSAL ON JUNE 14
BAJAJ-AUTO - 9910 Change: 53.75 (0.55 %)News: In a regulatory filing to stock exchanges, the company has informed about the scheduled meeting of board of directors on June 14, 2022 to consider a proposal for buyback of equity shares
Views: We view this as a positive development with buyback of equity shares one of methods of utilisation of surplus cash on books amid limited capex spends. Bajaj Auto had surplus cash in excess of | 20,000 crore as of FY22 end and as per buyback regulation the maximum buyback quantum is expected to be ~| 7,500 crore (i.e. up to 25% of total shareholders networth). With a near about buyback price of ~| 4,000/share this corresponds to ~6.5% of equity capital of the company. In case promoters do not participate in the buyback the same gets increased to ~14% of equity capital, a move positive for minority shareholders. Notably, BAL also has one of the highest dividend yields (~4%) among Nifty stocks
Impact: Positive