Greaves Cotton Limited Buyback Offer 2019
Greaves Cotton Limited, a diversified engineering company that is a leading manufacturer and marketer of diesel engines, petrol engines, generator sets, pump sets, and construction equipment. With a 160-year-old engineering legacy spreading across India and a growing global presence, we take pride in our quality products and services.
(i) Agri Equipment: Manufactures and market agri equipment and is a market leader in petrol/ kerosene engines. The product range includes such as lightweight petrol, diesel engines, pump sets, power tillers, reapers, and mini-farming equipment, etc. The manufacturing facility is located at Gummidipondi (TN).
(ii) Automotive: Manufactures light diesel engines for automotive application (4.4 to 25 HP) for three and four wheeler small commercial vehicles. Greaves is the market leader in single and twin cylinder diesel engine. The manufacturing facility is located at Aurangabad and Ranipet (TN).
(iii) Auxiliary Power and Industrial Engine: Manufactures diesel and gas gensets in the range of 50-500 KVA, engines for marine, fire fighting pump sets, mining, rail cars, etc. The manufacturing facility is located at Pune. The diesel engines range from 1.4 to 750 HP range with an option for CNG/LPG fuel.
(iv) Construction Equipment: Manufacture range of compaction, concreting and earthmoving equipment. The manufacturing facility is located at Gummidipondi (TN).
Buy Back Offer Deal:
| Buyback Type: | Tender Offer |
| Buyback Record Date: | Jul 12 2019 |
| Buyback Opening Date: | Oct 18 2019 |
| Buyback Closing Date: | Nov 01 2019 |
| Buyback Offer Amount: | ₹ 240 Cr |
| Date of Board Meeting approving the proposal: | May 02 2019 |
| Date of Public Announcement: | May 02 2019 |
| Buyback Offer Size: | 5.16% |
| Buyback Number of Shares: | 13714286 |
| Price Type: | Tender Offer |
| FV: | 2 |
| Buyback Price: | ₹ 175 Per Equity Share |
Details of Buyback:
Salient financial parameters:
| Particulars(Cr) | Mar-18 | Mar-17 | Mar-16 |
| Revenue | 1,837.39 | 1,684.45 | 1,660.73 |
| Expenses | 1,589.97 | 1,438.30 | 1,394.00 |
| Profit/Loss | 202.62 | 180.63 | 198.78 |
| EBITDA Margins | 16.55% | 17.16% | 18.06% |
| PAT Margins | 11.03% | 10.72% | 11.97% |
| EPS | 8.28 | 7.4 | 8.21 |
How to Participate in buyback?
Profit from the buyback on the bases of acceptance Ratio:
| Acceptance Ratio | 33% | 50% | 75% | 100% |
| Amount Invested in Buyback | 1,69,142 | 1,69,142 | 1,69,142 | 1,69,142 |
| No. of Shares buyback | 376 | 571 | 856 | 1142 |
| BuyBack Profit | 10,152 | 15,417 | 23,112 | 30,834 |
| Profit | 6% | 9.11% | 13.6% | 18.2% |
Recommendation:
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I have received contract note from my broker for 55 shares against tendered 100 shares and entitlement of 37/310.
a) BSE
Under Individual Category total ~92 lakh shares are tendered.
b) NSE
Under Individual Category total ~11 lakh shares are tendered.
So total shares tendered under the Individual category is ~1 cr.
If we assume 50% shares tendered by Retail, then 50 Lakh is the figure.
Retail Quota is ~ 20 lakh.
So we can assume Retail AR would be close to 40%.
From where did you get the figures for Individual Category? BSE website gives only the total which is 311.42% subscription. If you have any source link please share.
Yes, you are correct Ranganathan Jii. I am just guessing from the trend.
My working is slightly different. The retail shareholding is 6.55% of Paid Up Capital. Assuming that same %age of total bid qty (40484919), the bids under retail category is likely to be 2651762, and hence I expect AR of around 73%.
Hello…anyone with analysis of what the acceptance ratio would be?
1st Day: 173598=1.34% shares tendered on BSE.
Any idea how many shares tendered?
15687190=120.57%@3.30pm today on BSE.
NO IDEA@NSE
Promoters are not participating in buyback. This is a good news since actual buyback ratio will be much more than 12%. Offer all the share u have on record date to get maximum benefits.
How to know that promotors are participating in buyback or not?
Whenever the company announces buyback at that time it mentions whether promoters are participating or not.
ER seems to be 12%
We can expect AR around 15 to 20%
Based on experience on other buybacks
Got letter for 45/375 and this comes to 12% ER
Hi, Just got email regarding this buyback. Is it really worth to participate on this buyback at current market condition. Bid price Rs.175/sh is hight than current market price. Then how it will work? Im not sure about this buyback. Folks, Please help me to know more about this please
Did you holding shares on record date? If yes, then at what price did you buy it?
Anybody received letter of offer and tender form?
What is the ER?
10%. 4/40. And 14/120
Finally…buyback dates announced…been an extremely long wait…Oct 18 buyback opens…
Any update on offer date ?????
Is greaves buyback also expected from buyback tax after latest announcement by Nirmala mam ? Any idea since it says the companies that made public announcement before July 5 will be exempted
Greaves Board resolution says. Rs………….. excluding taxes including buy back tax interalia………..
This means BB Tax will be born by company.
This is my understanding. MW Sir can throw more light on this.
no buyback taxes for the company who have announced before 5th July and same apply for Greeves cotton.
yes it will be exempted.
I had 310 shares as on record date which I sold today. With a dip, if it happens, I will purchase some shares near to my entitlement in BB. I expect that both ER and AR will be nearly same. So I hope purchase 100 shres only. Pl. guide me as to what quantity should I purchase?
Wait for the letter of offer to come then we will plan accordingly.
Should have sold the next day of the record date.
No,sir,. Sold on Friday only.
MW Sir, I have received email entitling me for 37 out of 310.
How much should I purchase for buy back? Pl. Guide me.
The company is not reluctant to push Buyback either they will wait another quarter for buyback or most probably SEBI will give permit them to Cancel Buyback as Tax laws have changed.
BSE buyback is open now. Hopefully this will also open soon…. Anyway company future looks good. so not worried about investments.
Any updates?
There has not been any update on buyback recently…even their audited results for q1 is done without a word about the buyback
*Greaves cotton buyback* The Company has received interim observations from SEBI in regard to the draft letter of offer filed by the Company on July 4, 2019 and is in the process of addressing them.
In light of the proposal to introduce a tax on distributed income by listed companies undertaking buyback of shares, vide the Finance (No. 2) Bill 2019 (introduced in Parliament on July 5, 2019), it is hereby submitted that the Company has filed before the Ministry of Finance and SEBI seeking clarifications and certain relaxations with respect to the Buyback.
Record date has been updated.
You have given rating as 2 which is considered poor
Can you do other analysis and present in comment section as u usually do
The research report of Nirmal Bag for more reading about the company:
https://www.nirmalbang.com/Upload/Greaves%20Cotton%20IC%2006052013.pdf
Greaves Cotton is Market Leader in 3W Diesel Engine which contributes about half its revenue.
hello
what would be the acceptance ratio of greaves cotton buy back for the retail share holders