FDC Buyback 2020

(i) A young visionary, Anand Chandavarkar, in the backdrop of India’s independence struggle, dreamed of building a world-class company in 1936. His vision of freedom was to create, to build, and to industrialize, in order to make the nation self-reliant in healthcare. In 1940, this partnership firm was incorporated as a private limited company – Fairdeal Corporation (Private) Limited and in 1986 its name was changed to FDC Private Limited. Thereafter, FDC became a public limited company and was listed on the Bombay and National Stock Exchange of India in 1996.

(ii) Today, FDC carries forward the flaming spirit of its first dream, achieving accreditations from the US-FDA, UK-MHRA, MCC-RSA, and the UAE, to cite a few.

FDC is a forerunner in the manufacturing and marketing of Oral Rehydration Salts (ORS) and Ophthalmics.

FDC has also set-up globally approved, multi-location manufacturing facilities for Active Pharmaceuticals Ingredients (APIs) as well as Finished Dosage Forms. These facilities are located at Roha, Waluj and Sinnar in Maharashtra, Verna in Goa, and Baddi in Himachal Pradesh.

FDC markets more than 300 products in India and exports many of these to over 50 countries.

Buy Back Offer Deal:

Buyback Type: Tender Offer
Buyback Record Date: Aug 21 2020
Buyback Opening Date: Sep 16 2020
Buyback Closing Date: Sep 29 2020
Buyback Offer Amount: ₹ 97.33 Cr
Date of Board Meeting approving the proposal: Aug 07 2020
Date of Public Announcement: Aug 07 2020
Buyback Offer Size: 6.31%
Buyback Number of Shares: 2,163,000
Price Type: Tender Offer
FV: 1
Buyback Price: ₹ 450 Per Equity Share

Details of Buyback:

The company has approved the buyback of its own fully paid-up Equity Shares of Re. 1/- each ("Equity Shares") from the equity shareholders of the Company, not exceeding 2,163,000 fully paid-up Equity Shares at a price of Rs. 450/- per equity share for an aggregate amount not exceeding Rs. 97.33 Crores (being less than 10% of the Paid Up Capital and free reserves as on March 31, 2020) from the existing equity shareholders of the Company on a proportionate basis through the "Tender Offer" route. As the size of the buyback is less than 10% of Paid-up Capital and Free reserves so shareholders' approval is not required. It means the buyback can be completed in a short period of time. Decided 21.08.2020, Friday, as the Record Date for the purpose of determining the names of the shareholders who shall be entitled to tender shares under the Buyback Offer.

Salient financial parameters:

Particulars( in Crores) Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20
Sales 888 994 1,013 1,074 1,089 1,309
Expenses 690 765 775 842 861 1,017
Operating Profit 199 229 238 232 228 291
OPM % 22% 23% 23% 22% 21% 22%
Other Income 46 39 50 45 43 114
Interest 2 1 1 1 1 3
Depreciation 39 34 35 35 33 38
Profit before tax 204 232 252 241 237 364
Tax % 27% 27% 25% 28% 28%
Net Profit 148 169 189 174 170 275
EPS in Rs 7.84 9.44 10.55 9.9 9.69 16.03
Source: Screener.in

How to Participate in buyback?

1. Firstly to be eligible for the buyback the investor should have shares of FDC Limited Buyback Offer 2020 in demat or physical form as on record date.               [ 21.08.2020 ]. 2. Once you have shares in demat, you can participate in the buyback process which is opening from [16.09.2020 to 29.09.2020] by selling your shares through your broker on NSE or BSE. 3. Then on [09.10.2020], 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 444 Shares at CMP of Rs. 332 [2,00,000/450=444)
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback 1,47,408 1,47,408 1,47,408 1,47,408
No. of Shares buyback 147 222 333 444
BuyBack Profit 17,346 26,196 39,294 52,392
Profit 11.76% 17.71% 26.6% 35.5%

Recommendation:

Review and Recommendation of FDC Limited Buyback 2020 by IZ team is: 3/10 Fair: 1-5 Good: 5-7 Excellent: 7-10 FDC-2018 Finished the buyback within two months and the final AR was 13.55%. FDC-2019 Finished the buyback within two months and the final AR was 19.55%.

16 Comments

    FDC Buyback Final Analysis:-

    1. Buyback Announcement date: 07.08.2020 — Share Price was Rs 336.25

    2. 444 shares bought at Rs 336.25 means an investment of 1,49,295

    3. Retail Acceptance Ratio was 30%. i.e. out of 444 shares, 133 shares have been buyback by the company. Profit on Accepted Shares= 15,128

    4. 311 Unaccepted shares were given back on 29.09.2020. The price on 29.09.2020 is 365.45, so if you sell 311 shares in 365.45, then it is a profit of 9,081

    5. Overall we can say a profit of 24,209 on FDC Buyback.

    Reply

    Total Cumulative Bid (Confirmed & Unconfirmed Bids) :- 13,209,564 (as on 28-Sep-2020 15:30:01 IST)
    Buyback Size:- 2,163,000
    Subscription :- around 6.6x

    Reply

      The nearest center to your address is :- Link Intime India Pvt. Ltd,
      Surya 35,
      Mayflower Avenue,
      Behind Senthil Nagar,
      Sowripalayam Road,
      Coimbatore – 641028.

      Reply

      Type:- Tender Offer
      Announcement Date:-7-Aug-20
      Promoter Participation in Buyback- Yes
      Record Date:- Friday, August 21, 2020
      Buyback Size:- 21,63,000 Shares (1.27%)
      Buyback Price:- Rs.450 /share .

      Reply

      Thanks for information…woth promoters participating the acceptance will be very low…
      But this is a pretty good company on paper IMO

      Reply

      If promoters are not going to participate, then only it Will be 6.31%, if I am not wrong.

      Reply

    This time also the gap between the current market price and buyback price is decent, but the AR won’t be more than 20% as we have seen in earlier buybacks. So play carefully this buyback around record date.

    Reply

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