Bajaj Auto share price was among the top buzzing stocks on the bourses today.
Why?
The company announced a share buyback worth Rs 25 bn. Earlier this month, the homegrown auto major had deferred its buyback plan.
The buyback price approved, is significantly higher than its current price.
This sent the auto company's stock soaring 4% on an intraday basis.
Here are five things to know about Bajaj Auto's buyback.
Since buybacks interest you, check out Equitymaster's newly launched corporate action pages.
Corporate action events often bring material changes to a company through changes in the capital structure.
In case of buyback, as a shareholder in cash rich companies, you should not only be wary of expensive buybacks. But if possible, use it to your advantage to rake in some cash.
Before you participate in Bajaj Auto's buyback, the reason behind the buyback must be investigated.
At the end of the day, an increase in earnings should be more a function of the inherent robustness of the business, as that's what will help it continue to grow at a healthy pace.
In December last year, we compared the big auto majors - Bajaj Auto and Hero MotoCorp to come at a decision which stock is better.
We reached out to Tanushree Banerjee, Co-head of Research at Equitymaster for her view on both companies.
Here's what she had to say...
Bajaj Auto share price opened the day 2% higher at Rs 3,870 against its previous close of Rs 3,813.
As the session progressed, the company extended gains and touched a high of Rs 3,953.
Bajaj Auto has a 52-week high quote of Rs 4,250 touched on 1 July last year and a 52-week low of Rs 3,028 touched last year in December.
On a YTD basis, the stock has gained 18%.
At the current price, the company is trading at a PE multiple of 20 and a price to book value of 3.7.
Bajaj Auto is one of the leading two and three-wheeler manufacturers in India and it's also world's fourth largest manufacturer.
The auto major has three plants in all, two at Waluj and Chakan in Maharashtra and one plant at Pant Nagar in Uttaranchal.
The Bajaj brand is well known for its research and development (R&D) product development process engineering and low-cost manufacturing skills.
Bajaj Auto is among the top companies which are riding the EV revolution in India when it comes to scooters.
For more details about the insurance sector, you can have a look at Bajaj Auto factsheet and quarterly results on our website.
You can also compare Bajaj Auto with its peers -
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...
Yash Vora is a financial writer with the Microcap Millionaires team at Equitymaster. He has followed the stock markets right from his early college days. So, Yash has a keen eye for the big market movers. His clear and crisp writeups offer sharp insights on market moving stocks, fund flows, economic data and IPOs. When not looking at stocks, Yash loves a game of table tennis or chess.
Equitymaster requests your view! Post a comment on "5 Things to know about Bajaj Auto's Rs 25 bn Buyback". Click here!
Comments are moderated by Equitymaster, in accordance with the Terms of Use, and may not appear
on this article until they have been reviewed and deemed appropriate for posting.
In the meantime, you may want to share this article with your friends!