Balrampur Chini Buyback 2019 Review

Balrampur Chini Mills

Balrampur Chini Buyback approved by its Board on 05-04-19 by its Board comprises proposal of Buyback of fully paid up Equity Shares of face value of Re. 1/- each not exceeding 84,38,327 (Eighty Four Lacs Thirty Eighty Thousand Three Hundred Twenty Seven) Equity Shares at a price of Rs. 175/- (Rupees One Hundred Seventy Five only) per Equity Share for an aggregate amount of ~ Rs. 148 crore. Balrampur Chini Buyback represents approximately 3.69% of the total paid-up Equity Share Capital of the Company and is on a proportionate basis under “Tender Offer” route.

See List of all Forthcoming and Recent Buybacks

Buyback News

Balrampur Chini Updates

  • Live Bidding
  • Balrampur Chini Buyback Entitlement ratio 8.04%
  • Buyback Issue 16-05:29-05-19
  • RD 18-04-19

Balrampur Chini Buyback 2019 & 2018 : Key Info

Buyback 19
Type Tender Tender
MP befo announcement139.1113
Announcement 01-04-1909-02-18
MP after above139.7119.7
MP befo BM137.75121
Board meet05-04-1921-02-18
MP after BM145.35116
Buy Back Price175150
% Premium on MP27.04%23.97%
BuyBack Size- Rs. Cr147.6799
BuyBack Size- Shares8,438,3276,600,000
Tot No.of shares228,438,327235,028,327
% Buyback3.69%2.81%
Equity Capital- cr114.22235.03
FV of Share in Rs.510
Record Date18-04-1906-03-18
Buy Back Issue date16-05:29-05-1912-03:23-03-18
Shares reserved- Retail 1,265,749990,000
Shares on RD 1568777724,363,332
Buyback Entitlement8.07%4.06%
Shares Tendered 32666189,898,972
Tendering ratio20.82%40.63%
Retail response258.08%999.90%
Aceeptance %38.75%10.00%

Balrampur Chini Buyback : Acceptance Ratio Possibilities:

This framework is based on estimation of shareholding of Balrampur Chini shareholders  who hold around 1500 number of shares. To this we have added estimates for
1) Few additional purchase  of Shares by existing shareholders with eye on earning additional returns through buyback.
2) Purchase of Shares by Arbitrage investors.
3) Data from Previous Buybacks

Based on approximations indicated above and considering a moderate tendering ratio, under normal circumstances Balrampur Chini Buyback could have acceptance ratio of 10-20%, a figure that will depend to a good extent on new arbitrage investors who buy into the stock.

Return Scenarios: Balrampur Chini Buyback

The absolute returns/Loss that may accrue to an Investors/Arbitrage trader are a function of Percentage Acceptance Ratio and Price Post Buyback.  Investors may kept in mind that stock markets are quite volatile at this  juncture and there are many political and other uncertainties. 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.

Shares Bought
Buyback Price175
Absolute Returns
Price when posted140.00
investment (Rs.)168000
MP Aft Buybk
Acceptance %135137139

This post is purely for informative and educational purpose and is in no way suggestive of taking any position in the counter. Profit or Loss in  any buy sell operation in stocks is associated with significant risk of capital loss. For more on Buyback Benefits and other issues please refer the earlier Posts.

 Buyback of Shares: A Primer for Retail Investors

About Balrampur Chini Mills

  • The Company was incorporated on 14th July, 1975 and is headquartered in Kolkata.
  • The Company is engaged in the business of manufacturing of sugar in India. Its allied business consists of manufacturing and marketing of Ethanol, generation and selling of power. Company has 10 sugar factories located in U.P. having an aggregate crushing capacity of 76,500 tons per day.
  • The Company’s 10 factories in Uttar Pradesh and possess:
    • An aggregate cane crushing capacity of 76,500 tonnes per day
    • Distilleries possess an aggregate capacity of 360 kilo litres per day
    • Saleable co-generation capacity of 163.20 megawatts

Balrampur Chini : Price Trend, Summary of Financials

Balrampur chini mills ltd price chart

Financial Overview

Market Cap- Rs. Cr3,327
Revenue FY18 – cr4342
CMP in Rs.146
Face Value1
Price / Earning (PE)13.74
Book Value76.58
Price / BV1.90
ROCE %13.28%
ROE  %12.83%
Dividend Yield1.72%
Sales 3 yr CAGR12.83%
Debt / Equity Ratio0.62
52 week High/Low146.20 / 58.80

Assessment: Balrampur Chini Buyback

  • Company has been reducing debt.
  • Balrampur Chini 3 Years ROE stands at quite respectable 25.90%
  • Balrampur Chini apart from sugar manufacturing is also engaged in ancillary businesses of ethanol manufacture and co-generation. The company has been expanding its Distillery capacity.
  • Balrampur Chini reported stellar numbers in Q3FY19.
  • As the company does not have the requirement to go for postal ballot and seek share holders approval , RD has already been announced and the the buyback should move at a relatively faster pace.
  • Any warning of lower monsoon may affect Balrampur Chini stock price. On he other hand any +ve news on Government ethanol policy or good results in Q4FY19 can lend support to the stock price.
  • Balrampur Chini Mills share in not in F&O which may make it volatile post Buyback.
  • Balrampur Chini Mills is a well managed company and has been generally investor friendly in the past.
  • The stock has moved up in anticipation of buyback. At these levels I donot intend to participate in Balrampur Chini buyback.

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.

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