Bajaj Auto to reconsider share buyback proposal after postponing decision

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Local motorcycle and three-wheeler manufacturer Bajaj Auto has informed that its board of directors will meet next week, Monday June 27, 2022, to deliberate further on the proposed buyback of the company’s fully paid shares.

“We inform you that a meeting of the Board of Directors of the Company is scheduled for Monday June 27, 2022, in particular to deliberate further on the proposal to buy back fully paid-up shares of the Company. pursuant to the Securities and Exchange Board of India (Redemption of Securities) Regulations 2018,” Bajaj Auto said in a regulatory filing.

Last week, the auto major’s board postponed a decision on its plan to buy back shares, after informing the stock exchanges on June 9 that its board would consider a proposal to buy back fully paid shares during of a meeting to be held on Tuesday 9 June. 14.

The company’s board of directors, during its meeting held on Tuesday, decided that “further deliberations are necessary in order to make a decision on the takeover proposal, and has therefore postponed the matter”, Bajaj had said. Auto in a swap folder. .

A stock buyback is a process by which a company purchases its own outstanding shares in order to reduce the number of shares available on the open market.

Bajaj Auto Ltd reported 10% growth in net profit for the March 2022 quarter at 1,469 crore against 1,332 crores in the corresponding quarter of the previous fiscal year. The increase in profit is mainly due to an exceptional item of 315 crores accrued as an incentive to receive from the government of Maharashtra under an incentive scheme.

On the other hand, operating revenue fell by 7% to 7,975 crores for the period under review. The company’s EBITDA (earnings before interest, tax, depreciation and amortization) fell 10% to 1,396 crore, while margins shrunk to 17.5%. Bajaj Auto recorded marginal growth in total vehicle sales to 2,75,868 units in May from 2,71,862 vehicles sold a year ago.

Bajaj Auto shares have gained more than 14% in 2022 (YTD) so far, while the auto stock is down around 11% over a one-year period.

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