Birlasoft Ltd Buyback 2022

Birlasoft combines the power of industry knowledge, enterprise solution and digital technologies to reimagine business processes for customers and their ecosystem. Its consultative and design thinking approach helps customers understand the value and outcome of the services being provided coupled with a transparent operating model. As part of The CK Birla Group, Birlasoft comprising of over 10,000 plus professionals, is committed to continuing its 158-year heritage of building sustainable communities.

Buy Back Offer Deal:

Buyback Type: Tender Offer
Buyback Offer Amount: ₹ 390 Cr.
Date of Board Meeting approving the proposal: May 27 2022
Date of Public Announcement: May 27 2022
Buyback Number of Shares: 78,00,000
Price Type: Tender offer
FV: 2
Buyback Price: ₹ 500 Per Equity Share

Details of Buyback:

The Company is is seeking approval of its shareholders by way of Special Resolution for buyback of up to 7,800,000 fully paid-up equity shares of face value of INR 2/- each ("Equity Shares") representing up to 2.79% of the total number of equity shares in the paid-up share capital of the Company, at a price of INR 500/- per Equity Share payable in cash, for an aggregate amount not exceeding INR 3,900 million/- (excluding transaction costs, applicable taxes and other incidental and related expenses) through the "tender offer" route as prescribed under the Securities and Exchange Board of India (Buy-back of Securities) Regulations, 2018, as approved by the Board of Directors of the Company at its meeting held on Monday, May 23, 2022 and as set out in the Notice of Postal Ballot dated Friday, May 27, 2022 ("Notice"), by way of Postal Ballot by voting through electronic means only ("e-voting"/ "remote e-voting").

Salient financial parameters:

Particulars Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22
Sales 3,224 3,320 2,250 2,551 3,291 3,556 4,130
Expenses 2,790 2,971 1,967 2,244 2,899 3,026 3,490
Operating Profit 435 349 283 306 392 529 640
OPM % 13% 10% 13% 12% 12% 15% 16%
Other Income 16 47 87 100 43 19 66
Interest 17 14 8 11 16 13 13
Depreciation 69 83 40 50 83 80 77
Profit before tax 365 299 322 346 336 455 617
Tax % 23% 20% 21% 16% 33% 29% 25%
Net Profit 281 239 253 289 224 321 464
EPS in Rs 14.22 12.08 12.8 10.56 8.11 11.57 16.59
Dividend Payout % 15% 17% 18% 19% 25% 30% 18%
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How to Participate in buyback?

1. Firstly, to be eligible for the buyback the investor should have shares of Birlasoft Ltd Buyback 2022 in demat or physical form as on the record date [-].
2. Once you have shares in demat, you can participate in the buyback process which is opening from [- to -] by selling your shares through your broker on NSE or BSE.
3. Then on [-], 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 400 Shares at CMP of Rs.372 ( 2,00,000/500=400)
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback 1,48,800 1,48,800 1,48,800 1,48,800
No. of Shares buyback 132 200 300 400
BuyBack Profit 16,896 25,600 38,400 51,200
Profit 11.35% 17.20% 25.81% 34.41%

Recommendation:

Review and Recommendation of Birla Soft Ltd Buyback 2022 from our IZ team is: 5/10 [ The IPO size decent and good arbitrage of 34% is available in the buyback. Current Entitlement is 3% ]

7 Comments

    Experts,

    Why birla soft equity and july future price wide difference like 8-9rs.

    As promoters are not participating in this byback, so whether it will benefit to only general category or reserve category also? Kindly explain.

      Sir,
      When promoters are not participating in the buyback, it will benefit to the general category only. Promoters being the major stakeholders will be considered under the General Category.

    Firm Entiletlement Ratio is around 7% in General Category if it converts to 20 to 30% AR than its a good deal

    As Promoters are not participating AR may be high in General Category Compare to Retail Category

      Would you please help in explaining this…

      With promoters not participating, how it would benefit more in General Category than Retail Category. TIA

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