Bajaj Auto shares fell sharply on Tuesday, as a key meeting of the automaker's board to discuss a proposed buyback of equity ended without a decision. In a regulatory filing, the company's management stated that further consideration was needed.
The Bajaj Auto stock dropped by Rs 196.2 or 5.1 percent after the announcement, closing the day at Rs 3,684.4 after gyrating within a narrow range around the flatline for most of the day.
According to CNBC-TV18, the board will meet again in a few days to discuss buybacks. The buyback is not cancelled, and the details will be finalized during this time.
Analysts expect the first buyback by the cash-rich company to come at a healthy premium to the current stock price.
Despite wild swings in the overall market, the news of the potential Bajaj Auto buyback has propelled the stock in the past few days.
Share buybacks are considered a tax-efficient way to reward shareholders.
"It is quite surprising that after giving a notice, they have delayed the buyback. Of course, the board of directors may decide not to proceed, to postpone, or to do anything else it deems appropriate,