SKF India Limited Buyback 2018

SKF India Limited has been a leading global technology provider since 1907. The Company fundamental strength is the ability to continuously develop new technologies – then use them to create products that offer competitive advantages to their customers. They achieve this by combining hands-on experience in over 40 industries with Their knowledge across the SKF technology platforms: bearings and units, seals, mechatronics, services, and lubrication systems. The Company success is based on this knowledge, their people, and their commitment to SKF Care principles.

SKF business is organized into four groups:

(i) Automotive business unit
(ii) Electrical business unit
(iii) Industrial business unit and
(iv) Service business unit.

SKF India has dedicated an Application Development Center at Bangalore responsible for customizing products & services.

SKF India (SKF) reported healthy Q1FY19 results. While Revenues grew 13.3% YoY at INR 755 crore, EBITDA grew 24% YoY to INR 116 crore. In Q1FY19, Auto contributed 43%, exports 7% & industrial 50% to its Revenues.

Net Sales for the Q2FY19 amounted to INR 7660 million as compared to INR 6798 million for the second quarter of the previous year, registering a growth of 12.7%. Profit After Tax amounted to INR 843 million as compared to INR 740 million for the same quarter in the previous year, registering a growth of 14%.

Buy Back Offer Deal:

Buyback Type: Tender Offer
Buyback Record Date: Dec 21 2018
Buyback Opening Date: Jan 23 2019
Buyback Closing Date: Feb 05 2019
Buyback Offer Amount: ₹ 399 Cr
Date of Board Meeting approving the proposal: Oct 24 2018
Date of Public Announcement: Oct 24 2018
Buyback Offer Size: 3.70%
Buyback Number of Shares: 1,900,000
FV: 10
Buyback Price: ₹ 2,100 Per Equity Share

Details of Buyback:

(i) SKF India Limited, Board of Directors in their meeting held on October 24, 2018, approved a proposal for buyback of fully paid up equity shares of the Company. (ii) SKF Buyback shall be on a proportionate basis through the ‘Tender Offer’ method at a price of INR 2,100 per Equity (FV Rs. 10) Share for an aggregate maximum amount of INR 3,990 million only.

Salient financial parameters:

Year Revenue(Cr) PAT(Cr) ROE EPS
2016 3,098.66 255.89 15% 48
2017 2,718.74 243.89 13% 46
2018 2,821.77 295.89 16% 57

How to Participate in buyback?

1. Firstly, to be eligible for the buyback the investor should have shares of SKF India Limited Buyback 2018 in demat or physical form as on the record date [21.12.2018] 2. Once you have shares in demat, you can participate in the buyback process which is opening from [23.01.2019 to 05.02.2019] by selling your shares through your broker on NSE or BSE. 3. Then on [15.02.2019], the payment will be given to you for accepted shares and unaccepted shares will be returned to your demat account.

Profit from the buyback on the bases of acceptance Ratio:

Buy 95 Shares at CMP of Rs.1700 [161,500/1700=95)
Acceptance Ratio 33% 50% 75% 100%
(i) Amount Invested in Buyback 161,500 161,500 1,61,500 161,500
(ii) No. of Shares buyback 31 47 71 95
(iii) BuyBack Profit 12,400 18,800 28,400 38,000
(iv) Profit(%) 7.6% 11.64% 17.58% 23.52%

Recommendation:

Review and Recommendation of SKF India Limited Buyback 2018 by InvestorZone team is: 4/10 Fair: 1-5 Good:5-7 Excellent: 7-10

Company Contact Details:

SKF India Limited Mahatma Gandhi Memorial Building Netaji Subash Road, Charni Road, Mumbai - 400 002 Phone No. +91 22 6633 7777 Fax No. +91 22 2281 9074 website: www.skf.com

26 Comments

    [ Final Analysis of SKF India 2018 ( Return Analysis) ]

    1. Buyback Announcement date: 24.10.2018—– Share Price was 1700.

    2. 95 Shares bought at Rs. 1700 means an investment of 161,500.

    3. Retail Acceptance Ratio was 100%. i.e. out of 95 shares, 95 shares have been buyback by the company. Profit on Accepted Shares= 38,000.

    4. Overall we can say a profit of 38,000 on an investment of 1,61,500 in less than 4 months.

    Reply

    *Skfindia,

    *8,766 bids for 2,38,558* shares received in retail category against *2,85,000* shares

    Issue just subscribed by 83.7% in retail

    Reply

    Hi,

    anyone please tell what is the current subscription for skf india buyback?
    where we can check subscription status?

    Reply

    Hey!! Can anyone help…
    I have not received any mail for buyback.
    Please suggest where I can check whether I am eligible for buyback or not. I was holding 83 shares on record date i.e 21 Dec

    Reply

    SKFINDIA Buyback

    Buyback Opening Date – January 23, 2019

    Buyback Closing Date – February 5, 2019

    Reply

    As price moving towards Buyback price then Acceptance Ratio will improve.

    Reply

    Key Financials of the Company

    1. The Company is Debt Free in term of the long-term debt.

    2. The Company has 764 Cr of Cash in books.

    3. The Company has excellent Current Ratio of 3.22.

    4. The EPS of FY17-18 is 57.30

    5. At CMP of 1789, the P/E stands at 31.

    6. The Company is generating positive cash flows in the last 5 years.

    Reply

    Fundamentally the company is very good. It can be a good buy at current levels.

    Reply

    Some Important Key Points in SKF India Buyback

    1. SKF came out with good results i n Q1FY19 & Q2FY19. This is likely to support share price

    2. In the case of Downturn in Auto demand threre could have some impact on company but company presently has enough demand for what it produces at its two plants.

    3. Based on market price of Rs. 1710 today and a buyback price of Rs. 2100 and if estimates of acceptance hold true, there seems to be reasonably good arbitrage opportunity in SKF Buyback. The stock could open gap up tomorrow in view of this and thus the estimated returns will change accordingly.

    Reply

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