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Why Bajaj Auto shares rose 3% today

Shares of Bajaj Auto gained as much as 3.25 per cent to hit intraday high of Rs 3,692 after the auto major announced amendment in dividend distribution policy

twitter-logoBusinessToday.In | March 18, 2021 | Updated 15:43 IST
Why Bajaj Auto shares rose 3% today
Bajaj Auto amends dividend distribution policy

Shares of Bajaj Auto rose over 3 per cent in intraday trade on the BSE on Thursday amid spurt in volume trade. In an exchange filing, the auto major said that it has amended the dividend distribution policy of the company.

Early today, Bajaj Auto shares opened higher at Rs 3,595 against previous close price of Rs 3,575.45 on the BSE. The stock gained as much as 3.25 per cent to hit intraday high of Rs 3,692. Paring some of early gains, shares were currently trading up by 2.02 per cent at Rs 3,647.60. Meanwhile, the BSE benchmark Sensex was trading 40 points or 0.08 per cent lower at 49,760.

On the volume front, there was spurt in volume trade as 0.37 lakh shares changed hands over the counter as compared to two-week average volume of 0.36 lakh stocks.

Prior to the amendment, the policy referred to "dividend pay-out of around 50 per cent of profits after tax on standalone financials, to the extent possible". Following the changes, the board will endeavor to arrive at a dividend pay-out as a percentage of profits after tax on the company's standalone financials, taking into account the surplus funds available with the company. The dividend distribution will be up to 50 per cent in case of surplus funds of up to Rs 7,500 crore, up to 70 per cent if it is between Rs 7,500 crore to Rs 15,000 crore and up to 90 per cent if it is above Rs15,000 crore.

Surplus funds for this purpose comprises investments in financial assets other than in equity shares of group companies and strategic investments, the company said.

"The final dividend will be recommended by the Board for approval of the shareholders in a general meeting, while interim dividend, if any, may be declared by the Board. The company currently has only one class of shares, i.e. equity shares," it added.

Also read: Why SBI Cards shares fell 4% in opening trade

Also read: Stock Market Live Updates: Sensex plunges 380 pts, Nifty at 14640; Infy, HCL Tech, Reliance, Nestle top losers

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