Bajaj Consumer Share Buyback: Smallcap FMCG company Bajaj Consumer Care announced that its board approved a share buyback upto Rs 80.89 crore at a price not exceeding Rs 240 per share through open market route.
What is a Share Buyback?
A share buyback, also known as share repurchase, is a corporate action to buy back its own outstanding shares from its existing shareholders usually at a premium to the prevailing market price. It can be an alternative tax-efficient way to return money to shareholders. Share buybacks reduce the number of shares in circulation, which can increase the share value and the earnings per share (EPS).
The maximum buyback price of Rs 240 per equity share represents a 34.72 per cent premium to Thursday’s closing price of Rs 178.15 on the BSE.
“The indicative maximum number of equity shares proposed to be bought back at the maximum buyback size and maximum buyback price under the buyback would be 33,70,416 equity shares (representing approx. 2.28 per cent which is less than 25 per cent of the total number of equity shares in the paid-up equity capital of the company as of March 31, 2022),” the company said in a regulatory filing.
The maximum buyback size represents 9.66 per cent and 10 per cent of the aggregate of the total paid-up equity share capital and free reserves of the company based on the latest audited standalone and consolidated financial statements of the company as on 31 March 2022, respectively.
Bajaj Consumer Care is the leading player in light hair oil category with the flagship brand Bajaj Almond Drops Hair Oil commanding around 65 per cent market share in its category. The company also manufactures other hair care and skin care products under various brands.
The timeline of the buyback will be released later on.
The stock which has a market capitalisation of Rs 2,700 crore has rallied over 32 per cent in the last 6 months. The smallcap was trading 3 per cent higher at Rs 183.65 after the buyback announcement on Friday.
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