15 Jun 2022 , 08:00 AM
Bajaj Auto’s board of directors agreed on June 14 to postpone a vote on a share repurchase plan that had been presented before it for discussion. In a regulatory filing, the business stated that it will not proceed with the planned strategy at this time because it required “additional deliberation.”
“We wish to inform that the company’s Board of Directors, in its meeting today, 14 June 2022, decided that further deliberations are required before making a decision on the buyback proposal, and thus deferred the topic,” it added.
Bajaj Auto’s shares fell to Rs3,641.05 per share on the BSE, the lowest level in 19 months, as investors hedged their bets following the company’s decision to postpone its share repurchase.
If the motion had been approved by the board, it would have been the first share buyback by the two-wheeler giant in 22 years. The last time the company’s board of directors approved such a proposal was in 2000 when 1.8 crore equity shares were purchased back for Rs 400 each.
Bajaj Auto, in particular, posted lower-than-expected sales figures for the month of May. It sold 2.75 lakh units in the month, which was less than the expected 3.12 lakh. In May, sales volumes increased by only 1% year over year and were down by more than 34% from pre-pandemic levels – as recorded in May 2019.
The company’s sales performance was laden by a bad month for exports. In May, two-wheeler exports plummeted 15% year on year to 1.53 lakh units, while three-wheeler exports dropped 67% to 10,163 units.
Bajaj Auto’s overall exports fell 22% in May compared to the same month last year, but domestic sales increased 85%.
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