Domestic two-wheeler major Bajaj Auto announced its biggest ever share buyback last week. The homegrown automobile player said that it will repurchase shares worth Rs 5,633 crore from investors at a price of Rs 12,000 per share, with analysts suggesting that retail investors may benefit from this buyback.
Bajaj Auto's buyback price implies a premium of nearly 16 per cent over its previous close price at Rs 10383.35. The auto major announced that its board approved a plan to buyback up to 46.94 lakh shares from investors, having a face value of Rs 10 each, representing 1.68 per cent of the total paid-up share capital.
SEBI requires 15 per cent of the offer size to be reserved for small shareholders (value less than Rs 2 lakh). This usually ensures a higher acceptance ratio for retail investors. Buybacks are usually done via tender method, where a shareholder offers his holding to be bought back. Not all shares tendered are guaranteed to be accepted. The final benefit depends on the acceptance ratio.
All shareholders on the record date shall be eligible to participate in the buyback. However, the offer is subject to shareholders’ approval at its upcoming annual general meeting (AGM). The record date to determine the eligibility of shareholders who can tender shares in the buyback, along with more details like entitlement ratio and more are yet to be announced.
Historical evidence suggests that if promoters do not participate in the buyback, the acceptance ratio turns out to be higher for retail investors. PL Capital said that promoters shall abstain from the buyback and expected payout date is the second week of July 2026. This, in turn, implies higher arbitrage opportunity for retail investors, if shares are purchased below buyback price.
Bajaj Auto Buyback: should you participate
With the context of minimum of 15 per cent reservation for retail investors, Nearly 7.04 lakh shares of Bajaj Auto worth Rs 844.92 crore at the buyback price will be reserved for small shareholders holding shares worth up to Rs 2 lakh on the record date, said Rinkle Vira, Equity Research Analyst at Anand Rathi Share & Stock Brokers Ltd in a research report.
"As per shareholding data of annual report 2025, individual investors qualifying above criteria held approximately 64,16,761 shares, implying an acceptance ratio of around 11 per cent for retail investors," the research analyst at the firm explained, while noting that the acceptance ratio can change on record date. She explained buyback scenario:
Existing retail shareholders of Bajaj Auto can participate in the buyback, as price offers good opportunity for retail investors to tender shares at decent premium, said Sunny Agrawal, Head of Fundamental Research at SBI Securities. Long term investors can continue to hold the shares, as the company has huge growth potential in medium to long term, he said.
"As the acceptance ratio like to be low, it doesn't make sense to encash on arbitrage opportunity wherein one can accumulate the shares from the open market and then tender in buyback, as buyback size is smaller (1.68 per cent of equity) and hence acceptance ratio is likely to be lower," Agrawal adds.
Bajaj Auto Q4 results
Bajaj Auto reported a 34 per cent YoY jump in the net profit at Rs 2,746.13 crore, while revenue soared 31.8 per cent YoY to Rs 16,005.7 crore for the March 2026 quarter. The two-wheeler major's ebitda was up 35.6 per cent YoY to Rs 3,322.7 crore, while Ebitda margins improved to 20.8 per cent. It announced a dividend of Rs 150 per share.
Bajaj Auto target price
ICICI Securities, Nirmal Bang Institutional Equities, HDFC Securities and Axis Direct have a 'buy' rating on Bajaj Auto with a target price of Rs 12,000, Rs 11,838, Rs 10,776 and Rs 11,410, respectively. Axis Direct said that the record date is expected to be the next key trigger for further clarity on timelines and investor participation.
YES Securities has an 'add' rating on the stock with a target price of Rs 11,626, while SMIFS has a 'reduce' rating on it with a target price of Rs 10,300. PL Capital downgraded Bajaj Auto to ‘hold' from ‘accumulate’ due to run-up in prices following the buyback announcement and disruptions from the West Asia conflict. It has a target price of Rs 10,400 on the stock.
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Published on: May 13, 2026 9:55 AM IST
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