Bajaj Auto to consider share buyback next week
Premium- Bajaj Auto's board to meet on June 14 to consider a proposal for buyback of fully paid-up equity shares of the company
Motorcycles and three-wheeler manufacturer Bajaj Auto informed that its board will meet next week on Tuesday, June 14, 2022 to consider a proposal for buyback of fully paid-up equity shares of the company. Shares of Bajaj Auto surged over a per cent at ₹3,920 apiece on the BSE in Friday's early deals.
“This is to inform you that the meeting of Board of Directors of the Company is scheduled to be held on Tuesday, 14 June 2022, inter-alia to consider a proposal for buyback of fully paid-up equity shares of the Company in accordance with the Securities and Exchange Board of India (Buy-back of Securities) Regulations, 2018," the company announced in an exchange filing on Thursday.
The outcome of the board meeting will be disseminated to the stock exchanges after conclusion of the meeting, the automaker further added.
A share buyback, also known as share repurchase, is a corporate action to buy back its own outstanding shares from its existing shareholders usually at a premium to the prevailing market price. It can be an alternative tax-efficient way to return money to shareholders. Share buybacks reduce the number of shares in circulation, which can increase the share value and the earnings per share (EPS).
Bajaj Auto Ltd reported 10% growth in net profit for the March 2022 quarter at ₹1,469 crore as against ₹1,332 crore in the corresponding quarter of the previous fiscal. The higher profit was mainly due to an exceptional item of ₹315 crore accrued as incentive receivable from the Maharashtra government under an incentive scheme.
Revenue from operations, however, fell 7% to ₹7,975 crore for the period under review. The company's EBITDA (earnings before interest, tax, depreciation and amortisation) fell 10% to ₹1,396 crore, while margins shrank to 17.5%. Bajaj Auto reported a marginal growth in its total vehicle sales at 2,75,868 units in May, as against 2,71,862 vehicles sold in the year-ago period.