Balrampur Chini Mills Ltd Buyback 2019

(i) India is the second largest sugar producer and the largest sugar consuming country in the world. Balrampur Chini Mills Limited is one of India’s largest integrated sugar manufacturing companies.

(ii) What makes Balrampur Chini Mills Limited (BCML) special is that it is more than a sugar company.It is also engaged in the ancillary businesses of ethanol manufacture and co-generation.

(iii) The Company’s 10 factories in Uttar Pradesh possess

a)  An aggregate cane crushing capacity of 76,500 tonnes per day

b) Distilleries possessing an aggregate capacity of 360 kilolitres per day

c) The saleable co-generation capacity of 163.20 megawattsBCML is more than just another industrial entity; it is a rural prosperity driver.

Buy Back Offer Deal:

Buyback Type: Tender offer
Buyback Record Date: Apr 18 2019
Buyback Opening Date: May 16 2019
Buyback Closing Date: May 31 2019
Buyback Offer Amount: ₹ 147.67 Cr
Date of Board Meeting approving the proposal: Apr 05 2019
Date of Public Announcement: Apr 05 2019
Buyback Offer Size: 3.69%
Buyback Number of Shares: 84,38,327
FV: 1
Buyback Price: ₹ 175 Per Equity Share

Details of Buyback:

The Board of Directors of the Company at its meeting held on 05.04.2019 has interalia approved a proposal to buy back up to 84,38,327 Equity Shares of the Company, being  3.69% of the total paid up equity share capital and free reserves of the Company, for an aggregate amount not exceeding Rs.147.68 Crores at Rs. 175 under the "Tender offer" route using the stock exchange mechanism. Promoters have shown interest in participating in the buyback.

Salient financial parameters:

Year Revenue(Cr) PAT(Cr) Equity(Cr) Net Worth(Cr) Debt(Cr) D/E EPS P/E
2016 2803 100 24.5 1231 1490 1.21 4.09 14.88
2017 3485 592 23.5 1541 1701 1.10 24.26
2018 4370 221 22.84 1587 890 0.56 9.41

How to Participate in buyback?

1. Firstly to be eligible for the buyback the investor should have shares of Balrampur Chini Mills Ltd Buyback 2019 in demat or physical form as on record date . [ 18.04.2019 ] 2. Once you have shares in demat, you can participate in the buyback process which is opening from [ 16.05.2019 to 31.05.2019  ] by selling your shares through your broker on NSE or BSE. 3. Then on [ 10.06.2019 ], 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 1142 Shares at CMP of Rs. 144 [2,00,000/175=1142)
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback 1,64,448 1,64,448 1,64,448 1,64,448
No. of Shares buyback 376 571 856 1142
BuyBack Profit 11656 17701 26536 35402
Profit 7.08% 10.76% 16.12% 21.52%

Recommendation:

Review and Recommendation of Balrampur Chini Mills Ltd Buyback 2019 by IZ team is: 3/10 Fair: 1-5 Good:5-7 Excellent: 7-10 [ There is a good upside of 21% from CMP of 144. So arbitrage is good. It is looking good at CMP as it might give 10% gain before buyback the way share has shown strength in 2-3 days session. However, at this stage, the AR would be around 5-10% for retail.]

Company Contact Details:

Registered Office: "FMC Fortuna", 2nd floor, 234/3A, A. J. C. Bose Road, Kolkata - 700020 CIN: L15421WB1975PLC030118 T: +91 33 2287 4749 F: +91 33 2287 3083

      Buyback has been closed. Now settlement will be done on 10.06.2019.

    Entitlement based on Record date

    Reserved Category for Small Shareholders = 5 Equity Shares out of every 62 Equity Shares

    General Category for all other Eligible Shareholders = 3 Equity Shares out of every 89 Equity Shares

      I sold all shares on record date i.e. 18th April morning. Can i buy again and tender? Please suggest I am new to equity market

        Yes you can as you are eligible for buy back you purchase the shares again and offer before the due dates. But you have to keep the shares in your do account for offering the same

          I had 350 shares which I sold on record date. As per Market wizard 26 shares will be accepted. so I should buy 28 shares and tender 28 or should I buy 28 and tender 350.Basically all my 28 shared shares should be accepted. Your response is much appreciated. Thanks for the help

    What will be the AR
    should we participate
    Is company fundamentally sound

    Approved the buyback of fully paid up Equity Shares of face value of Re. 1/- (Rupee One
    only) each not exceeding 84,38,327 (Eighty Four Lacs Thirty Eighty Thousand Three
    Hundred Twenty Seven) Equity Shares (representing upto 3.69% of the total paid-up
    Equity Share Capital of the Company as on March 31, 2018) at a price of Rs. 175/- (Rupees
    One Hundred Seventy Five only) per Equity Share payable in cash for an aggregate
    amount of upto Rs. 147,67,07,225 (Rupees One Hundred Forty Seven Crores Sixty Seven
    Lacs Seven Thousand Two Hundred Twenty Five only) excluding transaction costs viz.
    brokerage, securities transaction tax, goods and service tax, stamp duty, etc., which is
    approximately 9.82% and 9.76% of the fully paid-up Equity Share Capital and Free Reserves
    (including Securities Premium Account) as per the latest Audited Standalone and
    Consolidated Balance Sheet of the Company for the financial year ended March 31, 2018,
    respectively, on a proportionate basis through the “Tender Offer” route using Stock
    Exchange Mechanism as prescribed under Securities And Exchange Board of India (Buy-
    Back of Securities) Regulations, 2018 (the “Buyback Regulations”) and the Companies Act,
    2013 (as amended) (the “Act”) and rules made thereunder from the equity shareholders of
    the Company who hold Equity Shares as on the record date (“Buyback”). The buyback
    would be subject to applicable statutory approvals.

    21% upside from the Current Market price.

    (i) This time also the size of buyback would be around 100 cr.
    (ii) Size of Equity is 22.84 Cr on Fv=1.
    (iii) As on 31.03.2018, no. of Shareholder having shares up to 2 lakh = 4,40,66,344

    Last Year buyback detail

    1. Buyback Size= 99 Cr ( 2.41% of Paid-Up Capital Equity).

    2. Buyback Price = 150.

    3. Share Price = 114 ( on 21-02-2018 when buyback was announced).

    4. Record Date = 06.03.2018( Share price on 05.03.2018 was 107 but then it fell drastically to 86 within 10 days. However, at that time the whole market was bleeding).

    5. Final AR for Retail Category = 10%.