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A Plethora of Buybacks

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A Plethora of Buybacks

 

The Buyback of shares is governed by Sec 68, 69 and 70 of the Companies Act, 2013; and further by the Companies (Share Capital and Debentures) Rules, 2014. For Listed Companies, the SEBI Regulations for Buyback will also be applicable.

The listed Indian Equity space is seeing a plethora of buyback issues. Given the nervousness and uncertainty in this COVID-19 unreal reality it is not surprising that companies are resorting to buybacks to take advantage of low share prices and in an endeavour to re-assure shareholders.

Buybacks can be carried out in two ways:

  • Shareholders may be presented with a tender offer whereby they have the option to submit (or tender) a portion or all of their shares within a certain time frame and at a premium to the current market price. This premium compensates investors for tendering their shares rather than holding on to them.
  • Companies buy back shares on the open market over an extended period of time.

Advantages of Buyback:

  • It is an alternative mode of reduction in capital without requiring approval of the Court/CLB(NCLT),
  • To improve the earnings per share;
  • To improve return on capital, return on net worth and to enhance the long-term shareholders value;
  • To provide an additional exit route to shareholders when shares are undervalued or thinly traded;
  • To enhance consolidation of stake in the company.
  • To prevent unwelcome takeover bids;
  • To return surplus cash to shareholders;
  • To achieve optimum capital structure;
  • To support share price during periods of sluggish market condition;
  • To serve equity shareholders more efficiently.

Summary of Recent Buybacks:

Company Buyback price Buyback Type Announcement Stake Value (Cr)
Emami Ltd 300 Open Market 27 Mar 20 1.43% 194
Ramkrishna Forgings Ltd 250 Open Market 21 Mar 20 40
Motilal Oswal Financial Services Ltd 650 Open Market 21 Mar 20 7.51% 150
Dalmia Bharat Ltd. 700 Open Market 21 Mar 20 500
Delta Corp Ltd. 100 Open Market 28 Mar 20 4.61% 125
Just Dial Ltd. 700 Tender Offer 30 Apr 20 4.84% 220
Tanla Solutions Ltd. 81 Tender Offer 22 Apr 20 13.54% 154
Thomas Cook India Ltd. 57.5 Tender Offer 28 Feb 20 6.90% 150
Coral India Finance and Housing Ltd. 17 Tender Offer 14 Feb 20 24.86% 21.08
Tip Industries Ltd 140 Tender Offer 13 Feb 20 9.23% 18.9
Granules India Ltd 200 Tender Offer 21 Jan 20 4.92% 250
Aster DM Healthcare Ltd. 210 Tender Offer 09 Jan 20 1.13% 120
NIIT Technologies Ltd. 1725 Tender Offer 23 Dec 19 3% 336
Jagran Prakashan Ltd. 75 Open Market 09 Dec 19 4.55% 101.2
JB Chemicals and Pharmaceuticals Ltd. 440 Tender Offer 12 Nov 19 3.68% 130
Indiabulls Ventures Ltd 150 Tender Offer 11 Oct 19 12.61% 1000
IndiaBulls Real Estate Ltd. 100 Tender Offer 11 Oct 19 11% 500
Kaveri Seed Company Ltd. 700 Tender Offer 24 Sep 19 4.44% 196
HEG Ltd 5500 Tender Offer 26 Nov 18 3.41% 750
Bharat Heavy Electricals Ltd. 86 Tender Offer 25 Oct 18 5.16% 1628
Freshtrop Fruits Ltd 110 Tender Offer 23 Aug 19 8.23% 11
NIIT Ltd. 125 Tender Offer 10 Aug 19 15.99% 335
Star Cement Ltd. 150 Tender offer 21 Jun 19 1.62% 102
SmartlinkHoldings Ltd. 130 Tender Offer 14 Jun 19 24.85% 54.6
Adani Ports Ltd. 500 Tender offer 04 Jun 19 1.89% 1960
Triveni Engineering Ltd. 100 Tender Offer 03 Jun 19 3.88% 100
BSE Ltd 680 Tender Offer 07 May 19 13.61% 460
Greaves Cotton Ltd 175 Tender Offer 02 May 19 5.16% 240
KPR Mills Ltd. 702 Tender Offer 29 Apr 19 5.17% 263.31

 

All figures in Rs Crs except for face value and no. of shares:

Company FV No of Shares Equity Pre Equity Post Networth Pre Networth Post
Emami Ltd 1 6466667 45 45 2214 2026
Ramkrishna Forgings Ltd 10 1600000 33 31 8819 8795
Motilal Oswal Financial Services Ltd 1 2307692 15 15 3050 2902
Dalmia Bharat Ltd. 2 7142857 39 38 10561 10075
Delta Corp Ltd. 1 12500000 27 26 1955 1842
Just Dial Ltd. 10 3142857 65 62 1288 1099
Tanla Solutions Ltd. 1 19012346 15 13 702 567
Thomas Cook India Ltd. 1 26086957 38 35 1716 1592
Coral India Finance and Housing Ltd. 2 12400000 10 7 124 128
Tip Industries Ltd 10 1350000 14 13 80 75
Granules India Ltd 1 12500000 25 24 1765 1527
Aster DM Healthcare Ltd. 10 5714286 505 500 3160 3097
NIIT Technologies Ltd. 10 1947826 62 60 2303 1986
Jagran Prakashan Ltd. 2 13493333 59 57 1936 1862
JB Chemicals and Pharmaceuticals Ltd. 2 2954545 16 15 1584 1460
Indiabulls Ventures Ltd 2 66666667 115 102 6653 5787
IndiaBulls Real Estate Ltd. 2 50000000 90 80 3546 3146
Kaveri Seed Company Ltd. 2 2800000 14 13 1234 1044
HEG Ltd 10 1363636 40 39 4597 3861
Bharat Heavy Electricals Ltd. 2 189302326 734 696 31503 30253
Freshtrop Fruits Ltd 10 1000000 12 11 74 73
NIIT Ltd. 2 26800000 33 28 1924 1643
Star Cement Ltd. 1 6800000 42 41 1783 1688
SmartlinkHoldings Ltd. 2 4200000 3 3 245 199
Adani Ports Ltd. 2 39200000 414 406 25567 23685
Triveni Engineering Ltd. 1 10000000 26 25 1110 1020
BSE Ltd 2 6764706 10 9 2976 2530
Greaves Cotton Ltd 2 13714286 49 46 1007 795
KPR Mills Ltd. 5 3750855 36 34 1585 1341

 

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