Bajaj Auto‘s biggest share buyback worth Rs 5,633 crore is set to close today, giving its shareholders the last chance to tender shares at Rs 12,000 per share, which is around 20% higher than the stock’s previous closing price.

The two-wheeler major launched its share buyback on July 1 as it aimed to buyback 46.94 lakh shares or 1.68% of the total paid-up share capital, with the record date being fixed on June 24.

Key things to know about Bajaj Auto’s buyback

Under Bajaj Auto’s buyback offer, eligible shareholders (those who held the shares as on the record date) in the reserved category for small shareholders are entitled to tender 17 equity shares for every 61 equity shares held as on the record date (June 24). For shareholders in the general category, the buyback entitlement is fixed at 17 equity shares for every 525 equity shares held on the record date.

A buyback of shares refers to a corporate action where a company repurchases its own shares from existing shareholders. Usually, the company purchases the shares at a higher price than current levels, encouraging investors to participate. Notably, Bajaj Auto has said that its promoters and promoter groups have indicated their intention not to participate in the buyback.

How to participate in Bajaj Auto’s buyback?

Eligible Bajaj Auto shareholders can participate in the offer by placing a bid through a stock broker registered with either the BSE or the NSE via a separate window on the stock exchanges. The registrar will complete the verification of tendered shares by July 10, 2026. Thereafter, the final acceptance or rejection of shares tendered under the buyback will be communicated to the stock exchanges by July 13.

After the buyback, Bajaj Auto will return the unaccepted shares by July 14, as per the schedule shared by the two wheeler maker in its exchange filing. “The Buyback reinforces the Company’s commitment to its shareholders by returning surplus cash to them in an effective and efficient manner, and is expected to improve its earnings per share and return on equity,” it added.

Also read: Bajaj Auto buyback opens July 1; shareholders can tender shares till July 7

How much profit can you make from Bajaj Auto’s buyback?

For example, let’s take an investor who bought 20 shares of Bajaj Auto at 9,750 apiece before the record date and is planning to tender shares in the buyback. The total value of her shareholding in the two-wheeler major as of the record date stood at Rs 1,95,000, making her eligible for Bajaj Auto’s reserved category for small shareholders (less than Rs 2 lakh).

As per the entitlement ratio, she is entitled to tender around 6 shares out of her 20 stock holding (nearly 27.9%). It is important to note that not all shares she tenders may be accepted in the buyback process.
Each accepted share would fetch ₹12,000, resulting in a profit of ₹2,250 per share over the assumed purchase price.Also read: Bajaj Auto’s Rs 5,633 crore share buyback | Key things to know

Should you participate in Bajaj Auto’s buyback?

All shareholders who held Bajaj Auto shares in their demat accounts as of the record date (June 24) will be eligible to tender shares in the buyback. Sunny Agrawal, Head of Fundamental Research at SBI Securities, explained that the entitlement ratio for small shareholders stands at 27.9% (17 shares for every 61 shares held) with the record date price of Rs 9,750 apiece.

“Assuming an acceptance ratio between 45% and 65%, a small shareholder is likely to get a return of 9.5% to 14.9% on his total holding. The return potential can be higher if the acceptance ratio is higher or the stock appreciates above Rs 9,750,” he said, advising investors to participate in the buyback.

Harshal Dasani, Business Head at INVasset PMS, also said that the reserved-category mechanics make participation a worthwhile arithmetic exercise even on a post-tax basis for retail shareholders already holding the stock. “Retail shareholders (holdings up to Rs 2 lakh value) sit in a reserved 15% pool of 7.04 lakh shares worth Rs 845 crore, and historically Bajaj Auto’s 2024 buyback delivered final retail acceptance ratios near 26%. If a similar acceptance pattern holds, a retail shareholder tendering all eligible shares can expect roughly 25-26% of holdings to be accepted at the Rs 12,000 price, with the residual returning at market price,” he said.

Vaqarjaved Khan, Senior Analyst of Fundamental at Angel One, meanwhile highlighted that with only 1.68% of equity being repurchased, the theoretical entitlement ratio works out to just 4.5–5%.

“That means most retail shareholders will see only a small slice of their tendered shares accepted, with the rest sold back at prevailing market price. The effective blended gain is far lower than the headline premium implies. Still, tendering costs nothing and any acceptance is pure upside so shareholders should tender their full entitlement regardless of the ratio,” he added.

Also read: Bajaj Auto total sales increase 28% in June

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)