Atul Limited Buyback 2023

Atul is an improvement-driven, integrated chemical company serving about 4,000 customers belonging to 30 industries across the world. The Company has established subsidiary companies in the USA (1994), the UK (1996), China (2004), Brazil (2012) and the UAE (2015) to serve its customers and thus enhance breadth and depth of its business.

Atul established successful joint venture companies with world-renowned multi-national companies namely American Cyanamid Company (now a part of BASF AG and Pfizer Inc) in 1947, Imperial Chemical Industries plc (now a part of Akzo Nobel and Astra Zeneca plc) in 1955 and Ciba-Geigy Ltd (now a part of BASF AG and Huntsman Corporation) in 1960.

Atul Limited is one of the largest integrated chemical companies of India, involved in the business of Aromatics, Supply of bulk Chemicals, Colors, Crop Protection, Pharmaceuticals etc.

Buy Back Offer Deal:

Buyback Type: Open Market
Buyback Offer Amount: ₹ 50 Cr.
Date of Board Meeting approving the proposal: Nov 07 2023
Date of Public Announcement: Nov 07 2023
Buyback Offer Size: 0.22%
Buyback Number of Shares: 66,666
FV: 10
Buyback Price: ₹ 7500 Per Equity Share

Details of Buyback:

The proposal to buyback not exceeding 66,666 (Sixty-Six Thousand Six Hundred Sixty-Six) equity shares of the Company (representing 0.22% of the total number of equity shares in the paid-up share capital of the Company) at a price of Rs. 7,500/- (Rupees Seven Thousand Five Hundred Only) per equity share payable in cash for an aggregate consideration not exceeding Rs. 50,00,00,000/- (Rupees Fifty Crores only).

Salient financial parameters:

Particulars (in Cr) Mar 2019 Mar 2020 Mar 2021 Mar 2022 Mar 2023
Sales + 4,038 4,093 3,731 5,081 5,428
Expenses + 3,270 3,191 2,813 4,168 4,620
Operating Profit 768 902 918 913 807
OPM % 19% 22% 25% 18% 15%
Other Income + 38 83 109 82 86
Interest 7 9 9 9 8
Depreciation 119 130 136 177 198
Profit before tax 680 845 882 810 688
Tax % 36% 21% 25% 25% 26%
Net Profit + 436 671 660 605 507
EPS in Rs 145.72 224.69 221.64 204.23 174.19
Dividend Payout %
 10% 12% 9% 12% 19%

How to Participate in buyback?

In this method of share Buyback, the company will be purchasing stocks from existing shareholders of the company directly from the market. Example: “ Atul Ltd.” announces buyback plan of its shares up to value of Rs. 7,500, it means that the company will be purchasing shares of " Atul Ltd. " from the open market at a price not exceeding Rs. 7,500 per share. Scenario 1- If the share price is below Rs. 7,500 in that case, the company will put buy order at Current Market Price and purchase shares. Scenario 2- If the share price is above Rs. 7,500, in that case, the company will put buy order at Rs. 7,500 only and if someone is ready to sell at that price or less then only company will get back shares.

Recommendation:

As it is an open market buyback, so no arbitrage is available.

14 Comments

    Good that it is open market in the end. With a paltry 0.22% even single share participants might have bitten the dust

    Reply

        I think Open Market buyback is banned by SEBI wef November or so.

        Reply

          Open Buyback are not banned yet. I like the Open Market buybacks much more than Tender Offers.

          Reply

            If not banned, atleast understand that it will be viewed as unwelcome/ undesirable which no reputable company may like to be classified as.

            Reply

            Last year in March, the share price of this company was around ₹10000/. It is rising every day since the announcement of the Board meeting. I will sell my holdings today and decide about buying again after knowing the outcome of the Board meeting.

            Reply

            Buy shares of the Company after the buyback announcement. In most cases share price will fall in a week or two after people know that it is Open market Buyback. Then Hold the shares for 2-3 years and then Sell.

            Reply

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