Elegant Marbles Ltd informed BSE on 20-05-19 that in its Board meeting on 28-05-19, the Board will also consider Proposal to Buyback the fully paid-up equity shares of the Company of face value of Rs. 10/- each. Elegant Marbles Buyback approved by its Board on 28-05-19 comprises a proposal of Buyback upto 8,25,000 (Eight Lakh Twenty Five Thousand Only ) Equity Shares of face value of INR 10/- each of the Company for an aggregate amount not exceeding INR 16.5 crore at a price not exceeding INR 200/- Elegant Marbles Buyback represents approximately 22.54% of the total paid-up equity capital of the Company and is on a proportionate basis under “Tender Offer” route.
See List of all Forthcoming and Recent Buybacks
Elegant Marbles Buyback : Key Info
Buyback 19 | Buyback 18 | |
|---|---|---|
| Type | Tender | Tender |
| MP befo announcement | 108.15 | 175.15 |
| Announcement | 20-05-19 | 22-11-17 |
| MP after above | 113.55 | |
| MP befo BM | 147 | |
| Board meet | 15-05-19 | 28-11-17 |
| Buy Back Price | 200 | 205 |
| % Premium on MP | 36.05% | |
| MP after BM | ||
| BuyBack Size- Rs. Cr | 16.5 | 17.22 |
| BuyBack Size- Shares | 825,000 | 840000 |
| Tot No.of shares | 3,660,000 | 4,500,000 |
| % Buyback | 22.54% | 18.67% |
| Equity Capital- cr | 3.66 | 4.50 |
| FV of Share in Rs. | 10 | 10 |
| Record Date | 25-01-18 | |
| Buy Back Issue date | 05-03:16-03-18 | |
| Shares reserved- Retail | 123,750 | 126,000 |
| Shares on RD | 314735 | |
| Buyback Entitlement | 40.03% | |
| Shares Tendered | 142108 | |
| Tendering ratio | 45.15% | |
| Retail response | 112.78% | |
| Aceeptance % | 88.66% |
Elegant Marbles Buyback : Estimate of Acceptance Ratio:
This framework is based on estimation of shareholding of Elegant Marbles 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 & info from earlier buybacks
Based on approximations indicated above and considering a moderate tendering ratio, under normal circumstances Elegant Marbles Buyback could have acceptance ratio of 50-80% (with upward bias), a figure that will depend significantly on price movement of the stock in coming days.
Estimated Returns: Elegant Marbles 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 kep in mind that stock markets are quite volatile at this juncture and there are many political and other uncertainties related to international markets. We have depicted estimated Absolute Returns in a table form as a function of various possible combinations of Acceptance Ratios and Price Post Buyback.
Shares Bought | 1100 | Nos. | |
|---|---|---|---|
| Buyback Price | 200 | ||
| Absolute Returns | |||
| Price when posted | 160.00 | ||
| Investment (Rs.) | 176000 | ||
| MP Aft Buybk | |||
| Acceptance % | 90 | 100 | 105 |
| 50% | -9.38% | -6.25% | -4.69% |
| 60% | -2.50% | 0.00% | 1.25% |
| 70% | 4.38% | 6.25% | 7.19% |
| 80% | 11.25% | 12.50% | 13.13% |
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 Elegant Marbles
- Elegant Marbles and Grani Industries Limited was incorporated on November 05, 1984 as Elegant Marbles and Grani Industries Private Limited.
- The company has its registered office at E -7/9, Abu Road, RIICO Industrial Area, Sirohi, Rajasthan, 327026, India.
- The company got converted into a Public Limited Company on July 11, 1994.
- The company came out with an Initial Public Offer in the year November, 1994 a
- The company is primarily engaged in the business of manufacturing, exporting and importing of choicest and exclusive range of quality granite, marble and allied products.
- The Company has its showrooms at Vile Parle and Lower Parel, Mumbai.
Elegant Marbles : Price Trend, Summary of Financials
Financial Overview
| Market Cap- Rs. Cr | 58 |
| CMP in Rs. | 159.6 |
| Revenue FY18 – cr | 24 |
| Net profit-cr | 4.37 |
| Equity Share Capital | 3.66 |
| Face Value | 10 |
| EPS | 11.94 |
| Price / Earning (PE) | 13.37 |
| Book Value | 247.66 |
| Price / BV | 0.64 |
| ROCE % | 5.91% |
| ROE % | 4.93% |
| Dividend Yield | 0 |
| Sales 3 yr CAGR | -3.32% |
| Debt / Equity Ratio | 0 |
| 52 week High/Low | 197.00 / 102.00 |
Assessment: Elegant Marbles Buyback
- Elegant Marbles reported poor Q4Fy19 results with decrease in both revenue & profits.
- Promoters holding in company stands at 71%
- Elegant Marbles is virtually debt free.
- The company has considerable investments which almost exceeds it current market cap.
- Elegant Marbles Stock is trading at just 0.64 times its book value.
- The company will have to to go for a postal ballot to seek share holders approval and hence the total time period may amount to 3-4 months.
- Elegant Marbles is not in F&O which may keep stock under pressure post buyback.
- Elegant Marbles Buyback price has been generous and the buyback is for a good number of shares.
- Elegant Marbles has consecutively hit two upper limits after announcement of buyback as investors expect a good amount of shares tendered will be get accepted.
- Elegant Marbles Buyback in 2018 resulted in 88% acceptance ratio.
- Such small scrips are many times controlled by operators and investors have less opportunity to participate.
Standard disclaimer: I am not a SEBI registered analyst. I may have vested interest in every stock I discuss. Please do your own due diligence as stock market investments have high degree of inherent risk. Further the data in the post is prone to errors.