It’s not surprising that the shares of a company which declared a buyback have seen bountiful gains on the stock exchanges, as a consequence. Shares of Bajaj Auto hit record highs of Rs7,420 apiece, a day after the company announced its buyback or share repurchase plans on late Monday evening.
However, all that exuberance and joy for those queuing up to buy shares of Bajaj Auto in pursuit of availing the buyback may be a bit misplaced. No doubt, the share buyback at Rs10,000 apiece is at a premium of a whopping 43 percent from the closing price of Rs6,985.7 on Monday. But not all will benefit from the buyback as the acceptance ratio is likely to be on the lower side.