Bajaj Auto`s Share Buyback
|
Case Code: CLFIN046 Case Length: 5 Pages Period: - Pub Date: 2025 Teaching Note: Available |
Price: Rs.200 Organization : - Industry :- Countries : India Themes: Financial strategy |
Abstract
The case study can be used to discuss the concept of share buyback and the advantages and limitations it holds for companies and for the shareholders. It can also be used to understand the motive behind the companies going in for a share buyback, the different modes of share buyback, and the impact of share buyback on the market price of the share.
Issues
- Share buyback, its advantages and limitations
- The motives behind companies opting for share buyback
- The different modes of share buyback
- The impact of share buyback on the market price of the share
Introduction
On January 8, 2024, Indian multinational automotive manufacturing company Bajaj Auto Limited (Bajaj Auto) announced a buyback (Refer to Exhibit I) of 4 million fully paid up equity shares, equivalent to 1.41% of its total outstanding shares, via the tender offer route. The total value of the buyback was estimated to be Rs. 40 billion at a price of Rs. 10,000 per share (Refer to Exhibit II), a staggering 43% premium on the previous day’s closing price. The announcement of the buyback drew considerable attention and had a positive effect on the market price of the share. On January 9, 2024 – a day after the announcement – the stock price of Bajaj Auto increased over its previous day closing price of Rs.6,983.85 by 357.15, which was more than 5% of the stock price, and the stock traded at a value of Rs.7,341..
Keywords
Share buyback; Tender offer; Bajaj Auto; Open Market Purchase; promoters ; SEBI share buyback regulations
Buy this case study (Please select any one of the payment options)
| Price: Rs.200 |
Price: Rs.200 | PayPal (4 USD) |
