Bajaj Auto Ltd. makes a corporate announcement

The January 2024 proposal was materially larger than the FY22 buyback in cash terms and reserve utilization, but smaller as a percentage of outstanding shares. Its pricing was also clearly disclosed at a substantial premium; the FY22 announcement used an open-market mechanism and did not specify a comparable premium, while the FY19 buyback terms and premium are not reported in the cited material.

What changed versus FY22

• The proposed size increased by Rs 1,500 Crores, or 60%, from Rs 2,500 Crores to Rs 4,000 Crores. This is derived from the two announced maximum amounts ^{[1] [3]}.
• Utilization rose by 6.72 percentage points on a standalone basis and 5.78 percentage points on a consolidated basis: 16.33% versus 9.61%, and 14.49% versus 8.71%, respectively. This is derived from the reported percentages ^{[1] [3]}.
• Despite the larger cash outlay, the proposed buyback covered fewer shares—1.41% versus 1.88% of paid-up capital—because the offer price was much higher. The FY24 proposal offered Rs 10,000 per share, compared with FY22's maximum Rs 4,600 ^{[2] [3]}.
• The premium comparison is not fully like-for-like. The FY24 tender offer disclosed premiums against both three-month VWAPs and the pre-announcement closing price ^[1]. FY22 was an open-market buyback with a maximum purchase price, not a fixed tender price; therefore, a tender-style premium cannot be inferred from the cited disclosure ^[3].

Analytical read: The 2024 proposal represented a more aggressive absolute return of capital and a much larger draw on reserves than FY22. Its disclosed pricing was exceptionally generous relative to the pre-announcement market benchmarks, whereas FY22's open-market structure provided no stated announcement premium. A numerical comparison with FY19 requires the original FY19 buyback announcement or letter of offer.

Route: The buyback is through the proportionate Tender Offer route using the stock-exchange mechanism, not an open-market repurchase. The approved price is Rs 12,000 per share. ^[5]

Relative to latest audited FY26 book value per share (31 March 2026):

• Consolidated basis: Rs 12,000 / Rs 138.93 BVPS = 86.37x book value, or approximately 8,537% above book value. ^[6]
• Standalone basis: Rs 12,000 / Rs 125.13 BVPS = 95.90x book value, or approximately 9,490% above book value. ^[7]

The FY26 standalone and consolidated financial statements were audited for the year ended 31 March 2026. ^[8] The resolution also authorised the Board or Buyback Committee to increase the price before the record date, provided the total buyback size remained unchanged through a corresponding reduction in shares bought back. ^[9]

The approved buyback of Rs 5,632.80 Crores equals 188.39% of the latest reported consolidated cash and cash equivalents of Rs 2,990 Crores (Q4 FY26). This strict cash comparison exceeds 100% because Bajaj Auto’s liquidity is also held in investments and other surplus funds. ^{[10] [11]}

The latest Q1 FY27 filing reported surplus funds of over Rs 21,000 Crores at June-end, rather than a directly comparable cash-and-cash-equivalents figure. On that broader surplus-funds basis, the buyback represents at least 26.82% of the reported position:

• Buyback: Rs 5,632.80 Crores ^[10]
• Surplus funds: over Rs 21,000 Crores ^[12]
• Derived ratio: Rs 5,632.80 Crores / Rs 21,000 Crores = 26.82%

Balance-sheet impact: assuming the full buyback amount is paid and ignoring transaction costs and intervening cash generation, surplus funds would mechanically decline from over Rs 21,000 Crores to approximately Rs 15,367 Crores. Management indicated that the buyback and the dividend together would result in roughly Rs 10,000 Crores of shareholder payouts in July, after which cash would rebuild toward around Rs 15,000 Crores by the end of FY27. ^{[13] [13]}

Thus, the buyback is large relative to reported cash equivalents, but it consumes only about 27% of the company’s broader surplus-funds position; the relevant liquidity measure is therefore surplus cash and investments, not cash equivalents alone.