Bajaj Auto share buyback offer fails to cheer investors. What analysts say?
Premium- Bajaj Auto share price today dipped to the tune of 2 per cent in early morning deals
Bajaj Auto share price: After the announcement of Bajaj Auto share buyback by board of directors of the company, stock market experts have gone bullish on the auto stock despite investors giving tepid response to the scrip. Bajaj Auto share price today opened downside and went on to hit intraday low of ₹3783.05 apiece levels on NSE, around 2 per cent lower from its Monday close of ₹3861 per share levels. However, the stock is showcasing some signs of recovery in mid-session.
According to stock market analysts, Bajaj Auto share price is sideways with positive bias and it may become highly bullish after breaching the immediate hurdle placed at ₹4,000. They said that the auto stock may go up to ₹4,300 apiece levels after breaching this hurdle.
Speaking on Bajaj Auto share price outlook, Ashwin Patil, Senior Research Analyst at LKP Securities said, "The size of the buyback is Rs2500 cr and at a price of Rs4600. However it's an open market buyback and not through a tender offer. This means that the stock may not reach those levels by the time the buyback offer closes. Therefore for retail investors, there may not be any significant upside because of this buyback. However, we believe that the stock definitely holds a good value through its intrinsic performance and can reach levels of ₹4400 which is as it is our target price. We maintain Buy on the stock."
Advising positional investors to add Bajaj Auto shares in one's stock portfolio, Rohit Singre, AVP — Technical Research at Bonanza Portfolio said, "Bajaj Auto share is trading sideway with positive bias.. Any dip in the stock should be seen as buying opportunity as the scrip has immediate support placed at ₹3750 and strong support at ₹3650. It has immediate hurdle placed at ₹4000 apiece levels. Once, it breaks this hurdle, it may go up to ₹4,300 per share levels in short term." Rohit Singre of Bonanza Portfolio said that those who have short term view should maintain stop loss at ₹3750 whereas those who have a long term perspective in Bajaj Auto shares are advised to maintain stop loss at ₹3650 apiece levels.
On Monday, the board of directors of the auto company at its meeting approved the proposal for buyback of the fully paid up equity shares of the company having a face value of ₹10 each from the existing shareholders of the company (except promoters, promoter group and persons in control of the Company) from open market through stock exchange mechanism. Bajaj Auto share buyback will be done from open market through stock exchange mechanism at a price not exceeding ₹4,600 per equity share aggregating up to ₹2500 crore.
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Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.