Bajaj Auto shares jump 6% to hit one-year high on buyback proposal; details here
In a remarkable market performance, Bajaj Auto Ltd experienced a significant boost in its share value, witnessing an increase of 5.96% to reach an impressive 52-week peak at Rs 7,059.75, up from its previous close of Rs 6,662.50. The sharp rise in the company’s stock was noted during the trading session on Wednesday, marking a notable high for the year. Bajaj Auto announced through a filing with the Bombay Stock Exchange (BSE) its plans to deliberate over a buyback proposal for its equity shares.
The company’s board is scheduled to meet on January 8, 2024, where they will discuss the buyback of fully paid-up equity shares, alongside other related matters. This decision will be in alignment with the regulations set forth in the Companies Act of 2013, the Securities and Exchange Board of India’s regulations on buybacks (2018 edition), and other relevant laws, as per the statement from Bajaj Auto.
Bajaj Auto shares jump 6% to hit one-year high on buyback proposal; details here
Market analysts, including Prashanth Tapse, Senior Vice President of Research at Mehta Equities, anticipate that the upcoming buyback will surpass the scale of the previous one. Tapse notes that the last buyback by Bajaj Auto was valued at Rs 2,500 crore, conducted through the open market at a buyback price of Rs 4,600 per share. With the current price around Rs 6,950, expectations are set for a buyback price range between Rs 7,800 and Rs 8,000.
Trading activity on the BSE showed a substantial movement in Bajaj Auto’s shares, with about 25,000 shares being traded. This volume was notably higher than the two-week average of 8,758 shares. The day’s trading resulted in a turnover of Rs 17.22 crore, bringing the company’s market capitalisation to Rs 1,97,788.32 crore. The trading session recorded 54,318 buy orders against 8,833 sell orders.
From a technical perspective, Bajaj Auto’s stock was performing well, trading above its 5-day, 10-day, 20-day, 30-day, 50-day, 100-day, 150-day, and 200-day simple moving averages (SMAs). The 14-day relative strength index (RSI) for the stock stood at 75.22, with values above 70 typically indicating an overbought condition.
Bajaj Auto shares jump 6% to hit one-year high on buyback proposal; details here
The company’s financial metrics, such as the price-to-equity (P/E) ratio, stood at 29.34, and its price-to-book (P/B) value was at 7.43. As of September 2023, the promoters held a 54.98% stake in the company. In sales performance, Bajaj Auto reported sales of 3,26,806 units in December 2023, a significant increase from the 2,81,514 units sold in the same period the previous year.
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