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 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 [Not available] 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.

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