Aarti Drugs Buyback 2021

Aarti Drugs Limited is engaged in manufacturing of Pharmaceuticals products. The Company has established a strong presence in the Anti-diarrhea, Anti-inflammatory therapeutic groups. With its manufacturing facilities at Tarapur and Sarigam, the Company manufactures Vitamins, Anti-arthritis, Anti-fungal, Antibiotics, ACE inhibitors, besides its range in, anti-diabetic, anticholinergic, sedatives and anti-depressant drugs. The Company is a part of the Alchemie Group of Companies.

Buy Back Offer Deal:

Buyback Type: Tender Offer
Buyback Record Date: Apr 01 2021
Buyback Opening Date: Apr 27 2021
Buyback Closing Date: May 10 2021
Buyback Offer Amount: ₹ 60 Crores
Date of Board Meeting approving the proposal: Mar 19 2021
Date of Public Announcement: Mar 19 2021
Buyback Offer Size: 9.82%
Buyback Number of Shares: 600000
Price Type: Tender Offer
Buyback Price: ₹ 1000 Per Equity Share

Details of Buyback:

The Board of Directors of the Company at its meeting held on 19.03.2021 has interalia approved a proposal to buy back up to 6,00,000 Equity Shares of the Company, being  9.28% of the total paid up equity share capital and free reserves of the Company, for an aggregate amount not exceeding Rs.60 Crores at Rs. 1000 under the Tender offer route using the stock exchange mechanism

Salient financial parameters:

Particulars (in Cr) Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20
Sales 1,097 1,140 1,195 1,244 1,561 1,806
Expenses 925 960 1,005 1,042 1,350 1,541
Operating Profit 172 180 190 202 211 266
OPM % 16% 16% 16% 16% 14% 15%
Other Income 1 0 4 1 6 6
Interest 42 48 40 38 44 37
Depreciation 31 37 38 40 43 49
Profit before tax 100 95 116 125 131 185
Tax % 23% 28% 29% 34% 32% 24%
Net Profit 77 69 82 82 90 141
EPS in Rs 7.97 7.09 8.57 8.73 9.52 15.17
Source: Screener.in

How to Participate in buyback?

1. Firstly to be eligible for the buyback the investor should have shares of Aarti Drugs Limited in demat or physical form as on record date 01.04.2020. 2. Once you have shares in demat, you can participate in the buyback process which is opening from [27.04.2021 to 10.05.2021] by selling your shares through your broker on NSE or BSE. 3. Then on [ Not available ], 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 200 Shares at CMP of Rs. 745 [2,00,000/1000=200)
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback 1,49,000 1,49,000 1,49,000 1,49,000
No. of Shares buyback 66 100 150 200
BuyBack Profit 16,830 25,500 38250 51000
Profit 11.29% 17.11% 25.6% 34.2%

Recommendation:

Review and Recommendation of Aarti Drugs Limited Buyback Offer 2021 by IZ team is: 4/10 Fair: 1-5 Good:5-7 Excellent: 7-10 [Though there is upside of 35% from CMP of 745 however, the size of the buyback is very small and AR won't be more than 10%. ] Last year AR = 7.36%. However, last year one share was accepted.

24 Comments

    I have received email and this quantity is mentioned as zero.

    Entitlement for Buyback in terms of the number of Equity Shares-0

    Am I eligible for buyback?

    Reply

    Where do you see AARTIDRUGS by end of June 30th, 2021. Will it surpass the Offer price of Rs. 1000 ?

    Reply

    So far I hvnt recd any link / form etc for the buy back offered by the company or my broker Angel Broking.
    How to aply now???

    Reply

      Please check your email. You must have receive the link. Or else contact Angel Broking, they will provide.

      Reply

        Just 1? Can you please confirm that. If 9.82% is the buyback offer, you should be entitled to 9.82% out of 100, that is an offer for at least 9-10 shares. It would be more, if there are less no. of small shareholders than the 15%, as 15% reserved for retaiil shareholders. Can someone explain if something is wrong in my calculations?

        Reply

        Yes, RamaD. BUYBACK size is just 0.64% not 9.82%.
        As Retail Shareholders as on Record Date are 21.84%, (More than 15%)
        so, Retail Entitlement is around 1.31 Lakh Shares (21.84%) out of 6 Lakh Buyback size. (Not 15% or 90,000 Shares i.e. Retail Quota)
        Entitlement Ratio becomes 1.31 Lakh (Entitled)/932 Lakh (of Total issued/authorised/paid up Equity shares) or 1.405% (ER)
        As per Past Acceptance %, AR likely to be 9-10%.

        Reply

    Whether the buy back of Aarti Drugs Ltd shares are in electronic form or physical form..?

    Reply

    I try to apply for Aarti drug on 1april, but it didn’t apply as u have to apply till it ex date 31march

    Reply

    Are there any formalities /steps I need to do on the record date on fools day if any thing more orso I amm interested in participating buyback- ARTI DRUGS

    Reply

    If i will buy today then it will be eligible for buy back or not .Icici direct showing 6.04.21 delivery date today.

    Reply

    what is probability of acceptance from retail segment?
    if it is 10% than very less profitable because balance unaccepted shares may not fetch 745/ price.

    Reply

      There should be something remarkable about this company for the recent 500% rise in the price, which is not clear from the financials. That should hold the key to investing.

      Reply

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