Ajanta Pharma Buyback 2019

(i) Ajanta Pharma is a specialty pharmaceutical company engaged in the development, manufacturing, and marketing of quality finished dosages. Committed to ‘Serve Health Care Needs Worldwide’, they produce a comprehensive range of specialty products targeting different therapeutic segments for the treatment of patients, customized to each market.

(ii) Their business includes Branded Generics in emerging markets of Asia and Africa, Generics in the developed markets of USA and Institution sales.

(iii) The branded generics business is spread in India and more than 30 emerging countries across Africa, CIS, the Middle East and South East Asia. In India, they have a presence in high growth specialty segments of cardiology, dermatology, ophthalmology and pain management where they have been able to provide consistently innovative products, many being 1st to the market, for patient convenience and compliance. 

Buy Back Offer Deal:

Buyback Type: Tender Offer
Buyback Record Date: Feb 12 2019
Date of Board Meeting approving the proposal: Jan 30 2019
Date of Public Announcement: Jan 30 2019
Buyback Offer Size: 5.22%
Buyback Number of Shares: 7,69,230
FV: 10
Buyback Price: ₹ 1300 Per Equity Share

Details of Buyback:

Approved the proposal to buyback of not exceeding 7,69,230  equity shares at a price of Rs. 1,300/-  per equity share (the "Buy Back Offer Price") pay in cash for an aggregate consideration not exceeding Rs. 100 crores (Rupees One Hundred crores only) (the "Buyback Offer Size") being 5.22% of the aggregate of the fully paid-up equity share capital and free reserves as per the audited standalone financial statements and 4.96% and audited consolidated financial statements of the Company for the financial year ended 31st March 2018 as per Tender Route

Salient financial parameters:

Year Revenue(Cr) Expense(cr) OPM% PAT(Cr) NPM(%) EPS
2016 1770 1211 34% 415 23% 47
2017 2007 1358 35% 506 25% 58
2018 2149 1527 31.70% 468 22% 53

How to Participate in buyback?

1. Firstly, to be eligible for the buyback the investor should have shares of Ajanta Pharma Buyback 2019 in demat or physical form as on the record date [12.02.2019 ]. 2. Once you have shares in demat, you can participate in the buyback process which is opening from [Not Announced Yet] by selling your shares through your broker on NSE or BSE. 3. Then on [Not Announced Yet], 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 153 Shares at CMP of Rs. 1089 [2,00,000/1300=153)
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback 1,67,538 1,67,538 1,67,538 1,67,538
No. of Shares buyback 50 76 114 153
BuyBack Profit 10550 16036 24054 32283
Profit 6% 10% 14% 19%

Recommendation:

Review and Recommendation of Ajanta Pharma Buyback 2019 by IZ team is: 2/10 Fair: 1-5 Good:5-7 Excellent: 7-10 [ Buyback size of 100 Cr is very small. Acceptance Ratio would be around 10%. The Quarterly results are very poor.]

      The size of the buyback is small. The price has already fallen a lot. So please avoid buyback.

    ER Calculation

    No. of Shares reserved for Retail Category- 1,15,384 Shares

    Shares up to 2 lacs as per Dec 2018 Pattern- 64,03,433 Shares

    ER-based on this 2%

    Q3 FY 2019 performance highlights (compared to Q3 FY 2018)

     Income from operations at Rs. 485 cr. against Rs. 587 cr., down 17%.
     EBITDA at Rs. 107 cr. against Rs. 198 cr., down 46%; EBITDA at 22% of revenue.
     Profit after tax at Rs. 67 cr., against Rs. 147 cr., down 55%; PAT at 14% of revenue.

    Quarterly results are very poor in every parameter. The company may have done buyback to arrest in price.

    Share will definitely open with gap down for sure.

    Buyback Size is less than 1% of total equity.
    Small Shareholders potion approx 1 lakh shares only

      Thanks for the number, though BSE/NSE website is not showing any update on BB.

      Is it tender route or open market. Also what is the size of the BB coz the results are bad??

        BSE now has the announcement. It is for 100 Crores in tender route. Not cheerful enough on size considering the market cap of the company is 9000 Crores

    Buyback Announcement

    This is with reference to our letter dated 21st January 2019, informing you about the Board meeting of the Company scheduled to be held on Wednesday, 30th January 2019 (“Board Meeting”), to consider, inter alia the unaudited financial results for the third quarter ended 31st December 2018.

    Pursuant to Regulation 29(1)(b) of LODR Regulations, we hereby inform you that, at the aforesaid Board Meeting, the Board of Directors will also consider a proposal for buy-back of the Equity Shares of the Company including matters related & incidental thereto (“Buyback”) and any other matter as the Board of Directors of the Company may decide during the course of the meeting.