Shares of Bajaj Auto Ltd. gained on a share buyback proposal. The stock, however, pared the gains in a weak market to close flat.
The board of directors is scheduled to meet June 14 to consider a proposal for buyback of fully paid-up equity shares, the two-wheeler maker said in an exchange filing after market hours on Thursday.
This is the first time in 22 years that the company has approved a share buyback.
Investors see share buyback as a positive as it signals value appreciation of the underlying stock. The company also has a pending dividend of Rs 140 per share, payable on July 30, 2022. The stock will trade ex-dividend on June 30.
Separately, Bajaj Auto's subsidiary Chetak Technology inaugurated an integrated electric vehicle manufacturing facility at Akurdi, Pune on Friday.
The company, in a statement, said Chetak Technology and its vendor partners will invest Rs 750 crore in the new EV manufacturing plant. It aims to make 5 lakh battery-powered two-wheelers in a year as it looks to meet demand from both domestic and export markets.
Bajaj Auto said it has sold more than 14,000 Chetak e-scooters since its launch and has received over 16,000 bookings.
Shares of Bajaj Auto rose over 2.3% at open before paring the gains.
Of the 53 analysts tracking the company, 39 maintain a ‘buy', 10 suggest a ‘hold' and four recommend a ‘sell', according to Bloomberg data. The average of the 12-month consensus price target implies an upside of 8.9%.
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