India (Commonwealth) _ Bajaj Auto secures surpasses Mahindra & Mahindra to secure the third spot as the most valuable car business in India intraday, on Tuesday.
One of the biggest producers of two- and three-wheelers in the nation saw its market capitalization soar to Rs 2.09 lakh crore on Tuesday, surpassing M&M’s market value of Rs 2.03 lakh crore, after over 20 months,. The most valued carmaker is Maruti Suzuki, which is followed by Tata Motors.
Following the announcement by the firm of a share repurchase at a 43% premium over Monday’s closing price, Bajaj Auto shares saw a 1.55% increase on Tuesday, closing at Rs 7,094, continuing their winning streak from the previous year.A Rs 4,000 crore share repurchase scheme at a price of Rs 10,000 per share was approved by the company’s board on Monday.
Through the tender process, it plans to purchase 40 lakh shares, or 1.41% of the outstanding shares of the firm.Over the last nine quarters, foreign portfolio investors have steadily raised their ownership in the firm, going from 10.20% in December 2021 to 14.64% in December 2023.
Investors are optimistic about the company’s diversification into the electric vehicle (EV) industry, which has resulted in the stock almost doubling over this time. The excitement around OLA Electric’s upcoming initial public offering (IPO) is positively impacting Bajaj Auto as well.
Because OLA Electric has a 10% market share in the electric two-wheeler market and shows that its electric three-wheeler business is not a proposition that will reduce margins, we think that listing OLA Electric could boost the valuation for Bajaj Auto’s EV business, according to analyst Abhishek of Sharekhan. Triumph’s distribution network is expanding, it has gained market share in the EV area, it is launching a new product, and it expects to gradually increase exports.
Analysts claimed that investors’ interest in Bajaj Auto’s shares has increased due to the company’s debt-free standing and dividend payment history. The corporation continues to generate more than Rs 5,000 crore in cash each year and more than 70% of its dividends are paid out to shareholders.
From Rs 25,210 crores in FY2018 to Rs 36,455 crores in FY23, the company’s sales increased by 45%. According to Anand Rathi Institutional Equities research analyst Akshay Karwa, “We keep expecting volume growth in the local premium segment and thereafter the company will expand its market share led by the 125cc segment with a market share of about 30%.” The 3W category is predicted to surpass last year’s volumes, having grown rapidly in FY24. Furthermore, as they broaden their nationwide dealer network, EV volumes should considerably improve.
Among the top automakers in India are Maruti Suzuki and Tata Motors. Both businesses have a lengthy history and a significant market share in India, where they provide a selection of cars to meet the various demands of Indian consumers.
In 1981, the Japanese Suzuki Motor Corporation and the Indian government established Maruti Suzuki as a joint venture. A variety of compact cars, sedans, hatchbacks, SUVs, and vans are available from Maruti Suzuki and more popular vehicles from the business are the Swift, Dzire, Alto, Wagon R, and Brezza.
Conversely, one of India’s biggest and oldest car companies is Tata Motors. The firm was established in 1945 and offers a wide range of products, such as trucks, buses, commercial vehicles, and passenger automobiles.
Maruti Suzuki is the undisputed leader in the Indian car industry in terms of market share. By 2021, the business will have around half of the market, while Tata Motors will have about nine percent. This is partly because Maruti Suzuki concentrates on building little cars. In contrast, Tata Motors is a major competitor in the commercial vehicle market, competing against global giants such as Ashok Leyland and Mahindra & Mahindra. Bajaj Auto is now India’s third-most valued car manufacturer.
