Ajanta Pharma Buyback 2021

(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: Jan 14 2022
Buyback Offer Amount: ₹ 285.60 Cr
Date of Board Meeting approving the proposal: Dec 28 2021
Date of Public Announcement: Dec 28 2021
Buyback Offer Size: 1.29%
Buyback Number of Shares: 11,20,000
Price Type: Tender Offer
FV: 2
Buyback Price: ₹ 2550 Per Equity Share

Details of Buyback:

Board of Directors of the Company, at its meeting held today, i.e., December 28, 2021, has inter-alia unanimously approved Buy-back of up to 11,20,000 fully paid-up Equity Shares of face value of ₹ 2/- each by the Company at a price of ₹ 2,550/- per Equity Share payable in cash for a total consideration not exceeding ₹ 285.60 crores which is not exceeding 10% of the total paid-up equity share capital and free reserves (including securities premium account) as per the audited financial statements of the Company for the financial year ended on March 31, 2021, through the “Tender Offer” route.

Salient financial parameters:

Particulars (Cr) Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21
Sales 1,474 1,749 1,983 2,126 2,055 2,588 2,890
Expenses 969 1,161 1,292 1,467 1,489 1,904 1,889
Operating Profit 504 589 691 658 567 683 1,001
OPM % 34% 34% 35% 31% 28% 26% 35%
Other Income 9 20 20 24 21 88 24
Interest 6 5 1 0 1 12 8
Depreciation 52 44 61 60 72 96 116
Profit before tax 456 559 648 623 514 664 900
Tax % 32% 26% 22% 25% 25% 30% 27%
Net Profit 310 416 507 469 387 468 654
EPS in Rs 35.25 47.23 57.59 53.25 44.35 53.6 75.56
Dividend Payout % 17% 17% 23% 0% 20% 24% 13%

How to Participate in buyback?

1. Firstly to be eligible for the buyback the investor should have shares of Ajanta Pharma Buyback 2021 in demat or physical form as on record date [14.01.2022]. 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 78 Shares at CMP of Rs. 2,264 (2,00,000/2550=78)
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback 1,76,592 1,76,592 1,76,592 1,76,592
No. of Shares buyback 25 39 59 78
BuyBack Profit 7150 11154 16874 22308
Profit 4.0% 6.3% 9.5% 12.6%
 

Recommendation:

Review and Recommendation of Ajanta Pharma Buyback 2021 by IZ team is: 4/10 [ER = 3%]

36 Comments

    Tomorrow (12/01/2022) is last day to buy for been eligible for Buyback.
    Hope fully price would reach 2323 before that, my target price to completely quit.

      Sumit ji,
      Your target price of Rs.2323/- is already reached today. I presume that you have not placed sell order in the opening of the trading hours. Thank you n all the best.

    Ajanta Pharma 2294.. Time to sell. some 3.5% profit… Better than getting into all Buyback things?

    Please suggest

      Sumit ji,
      Today I have sold the excess 14 shares @ Rs. 2293/-. However, the share price is likely to touch at least Rs. 2325 if not Rs. 2350/- during the next week. Thank you.

        Thanks SRK ji. I would now sell 50% at ~2300 and 50% at ~2323 instead of putting in buyback, as same would also yield 3-5% only with higher risk..

    Ajanta at 2205? Good time to buy?

    SRK Sir and other dear learned members, Kindly suggest.

        Sir,
        If you can get at that price, you will definitely be benefitted reasonably more than many investors who have already purchased at a higher rate. All the best.

      Sumit ji,
      Today I have purchased some shares @Rs.2200/-. I think it is a fair price. Thank you.

        Thanks. I also purchase some 30 shares today.. Would wait for 2180 or lower for buying more and would sell at 2300, if it comes before buyback…

          Sumit ji,
          I am also planning to purchase around 50 shares if available @ not more than Rs.2170/- before 07/01. I am quite confident that the price will reach around Rs.2300/- by 11/01. Thank you.

      Sir,
      Around 35% AR can be expected. In 2020, the AR was 39%. Thank you n all the best.

    I pray God to bless you all with a very very happy, healthy, wealthy, successful n prosperous new year. All the best n best of luck.

    Ajanta Pharma

    Buyback price. Rs.2550/-
    Mode of the Buyback. Through Tender Offer
    Record Date. 14/01/2022
    Buyback Size. 11,20,000 shares

    In the last year’s Buyback the AR was 39% in Retail Category. I am positive @ Rs.2200/- to Rs.2250/-. All the best to all of you. Thank you.

      Sir,
      Should buy at the current rate or wait for market correction till 14/01??
      Current rate is only 12-13% lower than the buyback rate, which can be wiped / added in 1-2 days…
      Please suggest.

        Sir,
        Only 22 shares are executed at the average price of Rs.2208/-regarding my buying order today. Around Rs.2200/-, we may purchase 40 shares and we may wait for the price of Rs.2150/- for another 40 shares. That’s my strategy. I solicit your valuable views in this regard. Thank you.

      Sir,
      Reasonably good AR. The unaccepted shares have also not given any bad impact regarding the price. Thank you.

        Sir,
        If AR is more than 40% in retail category, it will definitely be treated as reasonably good. But I doubt whether it reaches 40%.

    Great to see Ajanta Pharma so quick.
    Heard of Mahindra Home and GE shipping also?
    Experts kindly comment on profit possibility in each…
    Should enter now?

      GE was through market and Mahindra Home is private..

      So not really discussable..

      Sir,
      Though I am not an expert, I would like to share my views. Ajanta is likely to be more beneficial as the chances of reduction in the price of the unaccepted shares are expected to be low. Regarding GE, it was through open offer in 2019. Further, the share price is so fluctuating and hence a bit risky.

      However, on knowing the details of the Buybacks only we can take a decision. Thank you.

    AJANTA PHARMA LTD.has informed BSE that the meeting of the Board of Directors of the Company is scheduled on 28/12/2021 ,inter alia, to consider and approve Pursuant to Regulation 29(1)(b) of the Listing Regulations, we hereby inform that meeting of the Board of Directors of the Company is scheduled on Tuesday, 28th December 2021 to consider a proposal for buy-back of equity shares including matters related /incidental thereto.

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