Share Buyback: This Small-Cap Company Announces Plan to Repurchase 57.41 Lakh Shares at 11 per cent Premium; Do You Own It?
The company’s share has delivered an impressive return of over 100 per cent to its shareholders.
Bajaj Consumer Care, a prominent player in the Small-Cap FMCG sector, has unveiled its latest financial move with the announcement of a significant buyback plan. The company's decision, announced alongside its Q4FY24, aims to repurchase its own shares at a premium, reflecting its confidence and strategic financial planning.
The board of Bajaj Consumer Care has approved a buyback proposal amounting to Rs 166.49 crore. This buyback will involve up to 57,41,000 fully paid-up equity shares at a price of Rs 290 per share, payable in cash. This price represents an attractive premium of 11 per cent over the closing market price of Rs 260 per share on the day of the announcement.
The buyback, representing approximately 4.02 per cent of the total number of equity shares outstanding, is strategically positioned to enhance shareholder value. According to Bajaj Consumer Care, the offer size is structured to comply with regulatory guidelines, being 19.25 per cent and 20 per cent of the company's aggregate fully paid-up equity capital and free reserves based on standalone and consolidated financial statements for the fiscal year ended March 31, 2024, respectively.
In a regulatory filing to the stock exchanges, Bajaj Consumer Care highlighted the rationale behind the buyback, stating, "The buyback offer size represents a prudent utilization of company resources, aimed at optimizing capital structure while enhancing overall shareholder returns."
Bajaj Consumer Care shares closed the day at Rs 268.10 representing a rally of around 2.02 per cent. The current market capitalization stands at Rs 3842 crore. Additionally, the stock has delivered an impressive return of over 41 per cent in the past 1 year.
Investors must keep this small-cap stock on their radar.
Disclaimer: The article is for informational purposes only and not investment advice.
DSIJ's ‘Penny Pick’ service provides research-backed penny stock recommendations below Rs. 100. If this interests you, do download the service details here.