Bajaj Auto shares jump 6% to hit one-year high on buyback proposal; details here

Bajaj Auto Ltd shares rose sharply in Wednesday's trade to scale their one-year high level. The stock surged 5.96 per cent to hit a 52-week high of Rs 7,059.75 over its previous close of Rs 6,662.50. The bikemaker, in a BSE filing, said it will consider a proposal for buyback of equity shares.

"We wish to inform you that, the board of directors of the company at its meeting scheduled to be held on Monday, January 8, 2024 (Board Meeting), inter alia will consider a proposal to buyback of fully paid-up equity shares and other matters necessary and incidental thereto, in accordance with the applicable provisions of the Companies Act, 2013 (including the rules and regulations framed thereunder), the Securities and Exchange Board of India (Buy-back of Securities) Regulations, 2018, as amended, and other applicable laws," Bajaj Auto stated.

An analyst suggested that the buyback size will be bigger than the previous one. "This buyback size will be bigger than the previous instance. In its last offer the buyback was worth Rs 2,500 crore and was done via open market through stock exchange mechanism at the rate Rs 4,600 per share buyback price. If we assume a bigger buyback size compared to the previous instance at current price Rs 6,950, we can expect price Rs 7,800-Rs 8,000 range buyback," said Prashanth Tapse, Senior VP (Research) at Mehta Equities.

On BSE, around 25,000 shares were seen changing hands on BSE. The figure was higher than the two-week average volume of 8,758 shares. Turnover on the counter came at Rs 17.22 crore, commanding a market capitalisation (m-cap) of Rs 1,97,788.32 crore. There were 54,318 buy orders today against sell orders of 8,833 shares.

On technical setup, the counter was last seen trading higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-, 200-day simple moving averages (SMAs). The counter's 14-day relative strength index (RSI) came at 75.22. A level below 30 is defined as oversold while a value above 70 is considered overbought.

The company's stock has a price-to-equity (P/E) ratio of 29.34 against a price-to-book (P/B) value of 7.43. As of September 2023, promoters held 54.98 per cent stake in the company.

In terms of sales, the company's sales in December 2023 came at 3,26,806 units as compared to 2,81,514 units in the year-ago period.

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