Ajanta Pharma Buyback Offer 2023
(Updates 20Apr2023, 18Apr2023, 09Apr2023, 29Mar2023, 18Mar2023, 14Mar2023 and 10Mar2023 are available below. Even though this blog was posted originally on 07Mar2023, I will be continually updating this blog whenever new information is made available on the buyback offer.)
(This is for information purposes only. This should not be construed as a recommendation or investment advice. Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.)
2. As at close of 06Mar2023, the company's share price is Rs 1,165.05 per share, with a market cap of Rs 14,927 crore.
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(I have, over the years, analysed a number of companies' buyback offers. You can check them in the related blogs section below)
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5. To the best of my knowledge, the company has made three buyback offers in the past, between 2019 and 2022. All these three offers were made through 'tender offer' route; in which, the promoters participated in all the buyback programmes.
10. As As scheduled, the company's board of directors, during their meeting on 10Mar2023 announced brief details of the buyback proposal. Like the past three buyback offers, this time too the company has chosen the 'tender offer' route to buy back its own equity shares. And the record date (as well as ex-date) for buyback is 24Mar2023.
11. As shown in table 5 above, the offer size is Rs 315 crore; excluding buyback tax; and the size is Rs 389 crore, including buyback tax of Rs 74 crore.
13. Today, the company issued a public announcement giving full details of the buyback programme. The announcement includes an extract of the minutes of Board meeting held on 10Mar2023.
15. The company yesterday filed its 'Letter of Offer' for buyback of its shares via 'tender offer.' Key highlights from the offer are:
-- the promoters have expressed their intention to participate in the buyback offer
16. The entitlement ratio for 'small shareholders' (Reserved Cateogry) is 20.205 percent -- which means roughly 20 shares are eligible for buyback for every 99 shares held by eligible small shareholders as on record date.
17. The entitlement ratio for General Category (all shareholders other than 'small shareholders') is 1.486 percent -- which means nearly 3 shares are eligible for buyback for every 202 shares held by eligible general category shareholders.
18. As stated in Letter of Offer dated 28Mar2023, the buyback offer (via 'tender offer' route) opened on 31Mar2023 and it closes on 10Apr2023. Investors who wish to participate in the buyback offer need to surrender their shares, on or before 10Apr2023, as per the entitlement ratio and eligibility.
Updated Timeline of activities is enclosed >
19.The company's tender offer buyback closed on 10Apr2023. And by the end of today, that is, 18Apr2023, eligible shareholders who participated in the buyback should have received the money into their bank accounts.
The share price today closed at Rs 1,298 with a market cap of Rs 16,344 crore (based on outstanding shares post-buyback).
Updated Timeline of activities is enclosed >
20. The company issued a post-buyback public advertisement, giving details of bids accepted, post-buyback shareholding and others.
Table 8 below provides details of bids accepted under the tender offer route of the buyback offer: in the small shareholders category, valid shares received were more than two times the shares available for buyback and in the general category, valid shares received were more than 33 times the shares available for buyback.
21. Brief details of all the buyback offers by the company, details of shares extinguished via buybacks and post-buyback promoters' stake are updated in the following three tables:
-- in the past four buyback offers, the company was able to extinguish 4.64 percent of its paid-up equity capital
-- promoters' stake in the company has declined to 66.2 percent of total shareholding from 70.5 percent in 2019 after four buyback offers
(I'll be updating this blog as and when new developments take place in relation to the buyback offer -- to comment on business model, profit, solvency, liquidity, shareholding pattern, MF holdings, whether buyback from debt, capital allocation optimal, etc.)
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References:
post buyback public advertisement 19Apr2023
post buyback announcement 25Feb2022
post buyback announcement 24Dec2020
post buyback announcement 22Mar2019
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Disclosure: I've vested interested in Indian stocks and other investments. It's safe to assume I've interest in the financial instruments / products discussed, if any.
Disclaimer: The analysis and opinion provided here are only for information purposes and should not be construed as investment advice. Investors should consult their own financial advisers before making any investments. The author is a CFA Charterholder with a vested interest in financial markets.
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