Amrit Corporation informed on 17-06-20 that the Board of Directors of the Company at its meeting to be held on 22-06-20 shall consider the proposal for Buy-back of shares. Amrit Corp Buyback (Amrit Corporation Buyback) as approved by its Board entails a proposal to buyback of up to 1.75,000 fully paid-xp equity shares of face value Of Rs.10/ each of the Company at a price of Rs. 825/- per Equity Share (“Bay Back Price) for an aggregate amount of up to Rs.14,43,75,000/- (Rupees Fourteen Crore Forty Three Lakh Seventy Fi\/e Thousand Only ). Amrit corp Buyback represents up 5.45 % of the total number Of paid up Equity Shares of the Companyand is on a proportionate basis under “Tender Offer” route.
Amrit Corporation has intimated July 3, 2020 as the Record Date for the purpose of determining the entitlement and names of shareholders, who will be eligible to participate in the proposed Buyback.
Amrit Corporation Buyback : Key Info
Particular / Year
Buy Back 2020
|Buy Back first intimation||17-04-20|
|Market Price a day prior to this||54.7|
|Market Price a day after this||123|
|Buy Back BM||22-04-20|
|Buy Back Type||Tender Offer|
|Buy Back Price||81|
|Market Price on day of Board meeting for Buyback||60.25|
|Market Price a day after Buyback Board Meeting||66.4|
|% Premium on Market Price||34.44%|
|Buy Back Size in Rs. Crore||154.00|
|Buy Back Size ( Shares)||19,012,345|
|% Buyback of Equity||12.49%|
|Buyback shares for Retail||2,851,852|
|Equity Capital in crore||15.23|
|Face Value of Share in Rs.||1|
|Record Date||Oct 6 2020|
|Buy Back Issue date||1-07:14-07-20|
|Shares on RD||12,262,471|
Amrit Corp Buyback : Acceptance Ratio & Possible Return Scenario
Based on rough estmates of small shareholders and a general assumption on new arbitrage investors & consodering a moderate tendering ratio, Amrit Corporation Buyback could have quite high acceptance Ratio. Acceptance ratio could vary depending on price trend exhibited by stock, % shares tendered and number of new arbitrage investors.
The absolute returns (Profit/Loss) that may accrue to an Investors/Arbitrage trader are a function of Acceptance Ratio and the Price Post Buyback. THis is impacted by a number of factors which generally cannot be foreseen at the beginning. Normally Buybacks take 3-4 months time and in some cases, they can extend to 5-6 monhs as well. We have depicted some scenarios for Absolute Returns in a table form as a function of various possible combinations of Acceptance Ratios and Price Post Buyback.
|Absolute Returns %|
|MP Aft Buybk|
Amrit Corporation Ltd Buyback: Price Trend, Summary of Financials
|Market Cap- Rs. Cr||247|
|CMP in Rs.||770|
|Revenue – cr. (TTM)||74.24|
|Net profit-cr (TTM)||-2.59|
|Equity Share Capital||3.21|
|Price / BV||1.25|
|Sales 3 yr CAGR||17.42%|
|Debt / Equity Ratio||0.07|
|52 week H/L||812.00 / 491.00|
Assessment: Amrit Corporation Buyback
- Promoter holding is 74.23%
- Amrit corp has not plegded any shares.
- Mutual Funds holding in company is NIL.
- Company business segments includes Dairy Milk/Milk Products, Real Estate and Services.
- Trdading in company’s share is low.
- Company has almost no debt.
- I do not intend to participate on the Amrit corp buyback even as it can result in a quite high acceptance ratio.
Standard disclaimer: Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering and Management . Iam also Certified in some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2). This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/ Buy Back/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.