Aarti Drugs Limited Buyback 2023

Aarti Drugs Ltd. was established in the year 1984 and forms part of $900 Million Aarti Group of Industries with robust R&D Division at Tarapur, Maharashtra Industrial Development Corporation (MIDC) in close vicinity to manufacturing locations.

The Company is engaged in the manufacturing of Active Pharmaceutical Ingredients (APIs), Pharma Intermediates, Specialty Chemicals and also produces Formulations with its wholly-owned subsidiary – Pinnacle Life Science Private Limited.

Products under APIs includes Ciprofloxacin Hydrochloride, Metronidazole, Metformin HCL, Ketoconazole, Ofloxacin etc. whereas Specialty Chemicals includes Benzene Sulphonyl Chloride, Methyl Nicotinate etc.

Over the years, the Company has been able to carve a niche for itself and is looking forward to expand the volumes. With the government initiative to encourage private health insurance schemes, consumer spending on medicines is expected to increase, which will spur growth in the generic sector in the domestic market.

The manufacturing-units of Aarti Drugs Ltd. are GMP certified. The Company is also in the process of acquiring an ISO 9002 compliance for all its units and one of the units has already been approved.

The Company aims at becoming the first choice of this expanding market through better products, ensuring quality and timely delivery.

Buy Back Offer Deal:

Buyback Type: Tender Offer
Buyback Record Date: Aug 04 2023
Buyback Opening Date: Aug 09 2023
Buyback Closing Date: Aug 17 2023
Buyback Offer Amount: ₹ 59.85 Cr.
Date of Board Meeting approving the proposal: Jul 21 2023
Date of Public Announcement: Jul 21 2023
Buyback Offer Size: 0.72%
Buyback Number of Shares: 6,65,000
Price Type: Tender Offer
FV: 10
Buyback Price: ₹ 900 Per Equity Share

Details of Buyback:

The proposal to buyback not exceeding 6,65,000 ((Six Lakhs Sixty-Five Thousand) equity shares of the Company (representing 0.72% of the total number of equity shares in the paid-up share capital of the Company) at a price of Rs. 900/- (Rupees Nine Hundred Only) per equity share payable in cash for an aggregate consideration not exceeding Rs. 59,85,00,000 (Rupees Fifty-Nine Crore Eighty Five Lakh Only).

Salient financial parameters:

Particulars (in cr) Mar 2019 Mar 2020 Mar 2021 Mar 2022 Mar 2023
Sales + 1,454 1,635 1,915 2,251 2,498
Expenses + 1,252 1,387 1,511 1,930 2,216
Operating Profit 203 248 404 321 282
OPM % 14% 15% 21% 14% 11%
Other Income + 6 9 7 5 2
Interest 41 36 26 23 33
Depreciation 40 47 48 47 47
Profit before tax 128 175 338 256 205
Tax % 32% 22% 24% 24% 25%
Net Profit + 87 136 258 195 153
EPS in Rs 9.25 14.56 27.65 21.06 16.5
Dividend Payout % 3% 3% 9% 5% 6%

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 the record date [04-08-2023]. 2. Once you have shares in Demat, you can participate in the buyback process which is opening from [09-08-2023] by selling your shares through your broker on NSE or BSE. 3. Then on [24-08-2023], 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 222 Shares at CPM of Rs. 510 (2,00,000/900)
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback 1,13,220 1,13,220 1,13,220 1,13,220
No. of Shares Buyback 73 111 166 222
Buyback Profit 28,470 43,290 64,740 86,580
Profit% 25.00% 38.20% 57.00% 76.47%


    No of orders placed : 55,134
    I think single shares acceptance works here may be

    55,134 Orders Placed. A lot of People are going to get burnt here in short term.

      This buyback was a perfect trap for newbies. I expect price to be below 550 after buyback closes. Operators have distributed shares to Retailers here.

        It may not be as bad as you think, Gaurav ji. It may rise a few days after the buyback process is over like Ajantha Pharma recently did. Hope for the best and please have some patience in this script in particular.

    Indiamart Buyback :there will not be much diff in ER nad AR due to one share game

    Now, I am left with the balance of 119 shares of Aarti Drugs with the cost price of Rs. 401.05 after my yesterday’s selling of 120 shares at a good price. Risk rate is very low. Hopefully looking forward for a reasonable price for the unaccepted shares after the buyback. Thank you.

      Sold all the 119 shares for a reasonably good profit. Thank you.

        Great! I wrote this same strategy last night for you but then deleted it before posting as you are having a decent gain and the AR is going to be on a very low side.

          Rohit ji,

          Thank you very much for your kind response.

      Why yu sold out?? As per me… The share price will Rise after buyback… Pls explain I too hav shares of AD

        Welcome Prem ji, good point of view. Tomorrow is in nobody’s hands.Please be careful and be positive. I too have your view, though I am not participating in this buyback. Wish you happy returns and good luck.

    Got rid of my holdings at the best ever gains in a short term deal in my life.

      Awesome! Have you bought IndiaMart? I think it is a good time to buy today 3065 (if not) for buyback tendering. Hope to get double-digit returns.

        Thank you Rohit ji.Indiamarts were sold on the day of the Board meeting at 2906 & 2919/ . Not yet decided to participate in buyback. Looking forward to L& T . Already bought 40 @ 2444/ on Friday.Will sell tomorrow if profitable and await for the outcome of the Board meeting. Good luck to all.

          Nice, I missed buying LT. I placed an order in the pre-open session for 2520 and it opened at 2522 so my order does not get matched.
          I think you meant 2544 as the share opens at 2522 and keeps above that level the whole day?

            Yet another silly typing error made by me. Sorry, 2543.5 to be exact .

        Hope so. I am going to hold the shares for tendering in buyback. Will buy more in other family members accounts if it fall another 4-5 percent..

    True, Promoter taking away cash from company, that’ is why promoters increased their shares recently & they will also be participating in this buyback.
    It is misguiding for retail customers. I tendered 200 shares in 2021 buyback & got buyback for just 2 shares. They will show calculations with 33%, 50%, 75%, 100% acceptance ratio. These are all paid news, paid so called investment experts.

    The acceptance ratio will be around 1%. so if u have 100 shares only 1 share will be purchased under buyback for Rs.900. All 100 shares will be blocked till aarti mgt. decides on buyback approval qty. All balance 99 shares will be released to ur dmat account after their process is over.

    During this period (when ur all stocks r tendered for buyback) u cannot sell your stock even if it is in good profit.

    Be cautious. Happy & safe investing.

      Did you mean this portal shows calculations with 33%, 50%, etc..? It is based on assumption and no one can share the exact ER or AR till the record date or buyback closure date (not even the RTA). Also, please do not blame anyone. I will research about the increase in director shareholding and get back to you. Just being busy with the IT Returns.

      Probably 6 share would be accepted in buyback for your 222 shares tendered.

    Promoters trying to encash money from company. Else would not be that high buyback price than CMP. Good for buyback janta may be bad for shareholders

      No, I don’t think this is the intention of the promoters. If you check the history, the share is around the 600-800 level after 30 Mar 21 (closure of previous buyback) for a period of 3-4 months and then in a downtrend. As per my experience, good companies provide buyback at some premium on the highest share price if the share is in a downtrend. Also, they have posted a buyback for around 5% of the equity share capital and free reserve however they can do it up to 10% without special approval or even bigger size with special approval.

        Sir please convey the final opinion whether to go with this buyback or not.

          I do not suggest you to buy for the purpose of tendering as the size is quite small and I think AR will be very less.

        You have been proved right, Rohit Ji.Well done once again.

          Gopi mam, what do you think about 1-share strategy for aarti drugs buyback,
          i am new that why i asking this types of queatition.
          plz give me your advise regarding this.

            I am a man for sure Mitul ji. As far as I know, one share is generally accepted. But it’s worth trying if there is substantial difference between your purchase price and buy back price. I used this strategy by holding on to one share in cases where I booked profit or loss and decided not to participate in the buyback fearing lesser AR. I don’t bother about ER which often had no or hardly any relationship with the AR. Good luck to you.

    Breaking News


      You are most likely to suffer loss as the AR is not going to be much Gautam ji.

    How much cud be the approximate size of.the Buyback?.seems.if size is not large atleast 200 Cr there is no point participating in buyback. See the very low AR in Amrutanjan. Last buyback size of.Arti.drugs in 2021 was paltry 60 Cr

    Will wait for the outcome of the Board meeting to consider purchase.

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