The market capitalisation of Bajaj Auto on Tuesday breached the Rs 2 lakh crore mark as its shares gained on the Rs 4000-crore buyback announcement.

While the company proposes to repurchase its shares at a 43 per cent premium to the current market price, the announcement led to the stock zooming 6.21 per cent during intra-day trades to touch a 52-week high of Rs 7,420. It surrendered some of these gains on profit booking to end at Rs 7,093.75, a rise of 1.55 per cent.

On the NSE, the counter advanced 1.76 per cent to settle at Rs 7,107.

This came after it climbed 5.94 per cent to Rs 7,399 – also its new 52-week high.

This rally led to its market value going past the Rs 2 lakh crore mark to end at Rs 2,00,880.64 crore.

On Monday, the company’s board approved a proposal for buy-back of up to 40,00,000 shares of face value of Rs 10 each at a price of Rs 10,000 per share for a total consideration not exceeding Rs 4,000 crore. The buyback is subject to the approval of the shareholders.

Share buyback is a practice where companies decide to purchase their own shares from their existing shareholders either through a tender offer or through an open market. Bajaj Auto will be using the tender offer route.

For Bajaj Auto, the buyback programme represents 16.33 per cent and 14.49 per cent of the total paid-up equity share capital and free reserves (including securities premium account) as per the audited standalone and consolidated financial statements for the financial year ended on March 31, 2023, respectively.

The last time the Pune-based firm declared a buyback was in 2022 when it did a share repurchase of Rs 2,500 crore.