Bajaj Auto Approves ₹5,633 Crore Share Buyback

Bajaj Auto's Board of Directors has approved a significant share buyback program, aiming to repurchase up to 4,694,000 equity shares, representing 1.68% of its paid-up capital. The repurchase will occur at a price of ₹12,000 per share, totaling approximately ₹5,633 crore. The company plans to execute this buyback using the tender offer route.

This share buyback signals that Bajaj Auto's management believes the company's stock is trading below its intrinsic value. Such moves can enhance earnings per share (EPS) by reducing the number of outstanding shares, making the stock potentially more attractive to investors. It also demonstrates Bajaj Auto's strong financial health and commitment to returning capital and boosting shareholder value.

Bajaj Auto, established in 1945, is a major player in the Indian automotive sector, known globally for its two-wheelers and three-wheelers. It holds the position of India's largest exporter of these vehicles, reaching over 70 countries. The company has a history of returning capital to shareholders, having previously conducted buybacks in early 2024 (₹4,000 crore at ₹10,000 per share) and mid-2022 (₹2,500 crore at ₹4,600 per share).

Supporting this decision, Bajaj Auto recently reported robust financial results. For the fourth quarter of FY26, consolidated net profit increased by 34% year-on-year to ₹2,746 crore, on revenues of ₹16,006 crore. The preceding quarter, Q3 FY26, also showed strength with a 25% year-on-year profit jump to ₹2,759 crore on revenues of ₹15,378 crore.

For shareholders, the buyback offers an opportunity to tender their shares at a premium price of ₹12,000. This could lead to a decrease in the total number of outstanding shares, potentially improving EPS metrics. The company's capital structure will naturally adjust as funds are deployed for the buyback.

However, the buyback is contingent on securing necessary approvals. This includes a special resolution requiring shareholder consent, which could encounter delays or challenges. Regulatory approvals are also a prerequisite, and any unforeseen issues might impact the planned timeline. Furthermore, the Board reserves the right to adjust the buyback price or size, which could influence shareholder participation.

In the competitive two-wheeler and three-wheeler market, Bajaj Auto operates alongside peers such as TVS Motor Company and Hero MotoCorp. While domestic market dynamics shift, Bajaj Auto continues to leverage its significant export performance.

Investors will be closely watching for the announcement of the record date, which defines eligibility for the buyback. The release of the formal public announcement and letter of offer will detail the full process and timeline. Progress on shareholder and regulatory approvals, along with the commencement and completion of the tender offer period, will also be key points to track.