A share of Rs 180 will be sold for Rs 240! This company will buy its own stock at an expensive price, know what is the buyback plan?
The company issued a statement saying that the Board of Bajaj Consumer in its meeting held today on December 9, 2022, approved the proposal for the buyback of fully paid-up equity shares of the company with a face value of Rs 1/- each. The company said that it will do a buyback at Rs 240 per share.
Highlights
⏩ The board of Bajaj Consumer approved the share buyback plan on 9 December 2022.
⏩ Bajaj Consumer Care is a big name in the hair oil segment.
⏩ The market cap of Bajaj Consumer is Rs 2,700 crore.
Mumbai. Veteran company Bajaj Consumer (BAJAJ CONSUMER) has announced a share buyback.
The company said it will buyback 33.7 lakh shares from the open market for Rs 80.89 crore. The company said that it will do a buyback at Rs 240 per share.
After the announcement of the buyback, shares of Bajaj Consumer rose 3 percent to Rs 184 on the BSE on Friday. However, the stock price closed at 179.65. Bajaj Consumer said in the information given to the exchange that the company’s board has approved the buyback of 33.7 lakh shares through the open market at a price of Rs 240 per share.
The company gave information to the exchange
The company issued a statement saying “The Board of Bajaj Consumer at its meeting held today on December 9, 2022, approved the proposal for buyback of fully paid up equity shares of the company with the face value of Rs 1/- each. Shares aggregating to Rs 80.89 crore will be purchased from all shareholders / beneficial owners of equity shares of the company at a price of Rs 240 per equity share from the open market.
The maximum number of Equity Shares proposed to be re-purchased by the Company under this Buyback Plan at the Maximum Buyback Size and Maximum Buyback Value shall be 33,70,416 Equity Shares. This number is less than 25% of the total number of equity shares.
What is the business of the company?
Bajaj Consumer Care is a big name in the hair oil segment. The company’s flagship brand Bajaj Badam Drops Hair Oil has around 65 percent market share in its category. The company also manufactures other hair care and skin care products under various brands.
Bajaj Consumer has a market cap of Rs 2,700 crore, which has gained over 32 percent in the last 6 months. After the buyback announcement on Friday, this smallcap scrip was trading at Rs 183.65, up 3 percent.
What is share buyback?
When a company purchases its outstanding shares to reduce the number of shares available in the open market, it is called a buyback. This means that the company buys back its own shares from the investors.
Buybacks reduce the number of shares outstanding and thus earnings per share, often increasing the stock’s value. Any company does buyback in two ways. In these, the first is done through a tender offer and the second is bought back from the open market.
