Bosch Limited Buyback Offer 2018

Bosch Buyback Offer 2018

Bosch Limited is a leading supplier of technology and services in the areas of Mobility Solutions, Industrial Technology, Consumer Goods, and Energy and Building Technology. Additionally, Bosch has in India the largest development center outside Germany, for end to end engineering and technology solutions.

The Bosch Group operates in India through twelve companies, viz, Bosch Limited, Bosch Chassis Systems India Private Limited, Bosch Rexroth India Private Limited, Robert Bosch Engineering and Business Solutions Private Limited, Bosch Automotive Electronics India Private Limited, Bosch Electrical Drives India Private Limited, BSH Home Appliances Private Limited, ETAS Automotive India Private Limited, Robert Bosch Automotive Steering India Private Limited, Automotive Services and Solutions Private Limited, New Tech Filters India Private Limited and Mivin Engineering Technologies Private Limited. In India, Bosch set-up its manufacturing operation in 1951, which has grown over the years to include 18 manufacturing sites, and seven development and application centers.

Bosch Group in India employs over 31,000 associates and generated consolidated revenue of about ₨.18,300 crores (1.8 billion euros)* in 2016 of which ₨. 12,950 crores* from the third party. The Group in India has close to 18,500 research and development associates. In India, Bosch Limited is the flagship company of the Bosch Group. It earned revenue of over ₨. 10,500 crores in 2016.

Buy Back Offer Deal:

Buyback Type: Tender Offer
Buyback Offer Amount: ₹ 2159.010 Cr
Date of Board Meeting approving the proposal: Nov 05 2018
Date of Public Announcement: Nov 05 2018
Buyback Offer Size: 3.37%
Buyback Number of Shares: 1,028,100
FV: 10
Buyback Price: ₹ 21000 Per Equity Share

Details of Buyback:

The proposal to buyback not exceeding 1,028,100 (Ten Lakh Twenty Eight Thousand One Hundred Only) equity shares of face value of Rs. 10 of the Company (representing 3.37% of the total number of equity shares in the paid-up share capital of the Company) at a price of 21000 (Twenty One Thousand Rupees only) per equity share payable in cash for an aggregate consideration not exceeding 2159.010 Cr (Two Hundred Fifteen Crore only).

Salient financial parameters:

Year Revenue(Cr) PAT(Cr) EBITDA Margins Profit Margins EPS
FY16 10305 1531 24.0% 14.9% 488
FY17 11052 1741 23.0% 15.8% 561
FY18 12201 1370 21.0% 11.2% 450
1. The P/E of the stock based on FY18 EPS is 42. However, in the first 2 Qtrs of FY19, the company has clocked an EPS of 278. If we annualize it, then P/E based on FY19 earnings would be 34. 2. The Company is debt free.

How to Participate in buyback?

1. Firstly, to be eligible for the buyback the investor should have shares of Bosch Limited Buyback Offer 2018 in demat or physical form as on the record date [Not Announced Yet] 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 9 Shares at CMP of Rs.19500 [1,89,000/21000=9)
Acceptance Ratio 33% 50% 75% 100%
(i) Amount Invested in Buyback 1,89,000 1,89,000 1,89,000 1,89,000
(ii) No. of Shares buyback 3 4 6 9
(iii) BuyBack Profit 4,500 6,000 1,2000 1,3500
(iv) Profit(%) 2.38% 3.16% 6.33% 7.12%

Recommendation:

Review and Recommendation of Bosch Limited Buyback Offer 2018 by InvestorZone team is: 3/10 Fair: 1-5 Good:5-7 Excellent: 7-10 BOSCH Limited Buyback Offer 2016 detail

Company Contact Details:

Bosch Limited Hosur Road, Adugodi Bangalore-560030 Karnataka, India Phone No. +91 80 67528626 website:www.bosch.in

      Quarterly numbers shown by Dhanuka Agritech are good.

      Particulars ——–Q2FY19 ———Q2FY18——— %Change YoY
      Revenue(Cr)——– 385——– 349 ——– 10.1%
      Profit(Cr) —– 52——– 55 ——– 5.7%
      EBITDA(Cr) ——-79 ——– 77 ——– 2.52%

      The Company has also announced a Buyback at Rs. 550 ( an upside of 34%) for the maximum amount of 84 Cr subject to the approval of Shareholders. The maximum shares buyback would be 15 Lakh and out of which 2.25 lakh would be reserved for Retail Investors.

      Acceptance Ratio Calculations:

      1. Buy 363(200000/550) Shares at CMP of 410. The total investment would be 1,48,830.

      2. Total Number of Shareholder holding from 0 to 2500 Shares are close to 40 Lakhs. On that basis, the Acceptance ratio would be 5.625%. However, that is not correct, for exact calculation, we need no. of shareholders having shares between 0 to 363, which is not available anywhere. So Calculation of acceptance ratio is always on assumption basis.

      3. However, as we know the number of Retail shareholders who would be eligible for Buyback would be less than 40 lakh, so we can assume the buyback acceptance ratio to be roughly somewhere around 10-15% as of now.

    NHPC Ltd’s Q2FY19 standalone net profit rises 19.6% yoy to Rs1,219cr : In-line with Estimates
    The company’s standalone revenue stood at Rs2,495cr, up 26.6% yoy and 17.2% qoq

    Tomarow is board meeting of NHPC for buyback.
    CMP is 27.10.
    What will be buyback price any predictions?

    Which broker charges minimum and offers good services?
    If any one is having detailed information please share for the benefit of our friends.

      Do not expect better service as cheaper rate.

      I have switched over from HDFC to Religare to Sharekhan. I find Sharekhan most stable and most convenient and good platform out of all these. I get personalized RM whom you just call and he can take your orders, not a concern of calling 1800 number and remembering so many codes to dial (though these facilities are also available). U can put off-hours orders and their platform supports a lot of things for you to do online. After all, their brokerages is competitive for investors. If you are trader and having good volume, you can negotiate for better brokerages too. I am satisfied and not interested in switching to cheaper brokers..

    Please comment on tax calculations on the profit earned by tendering shares through buyback.

      Actually, there is two case in it.

      1. When the Company is buy backing the shares directly from shareholders.

      2. When the company is buy backing the shares from Stock Exchanges.

      We all mostly tendered shares under 2 category. So let us discuss it.

      1. Short-term capital gain (If the holding period is less than 12 months) – Capital gain is taxable at a flat rate of 15% under Section 111A as this transaction is chargeable to securities transaction tax (STT).

      2. Long-term capital gain (if the holding period is more than 12 months) – Capital gain exceeding Rs 1,00,000 shall be chargeable to tax at a flat rate of 10% under Section 112A as this transaction is chargeable to securities transaction tax (STT).

      Hope you got the point.

        Hi Market Wizard ,
        Is the exemption of 1 lac on long term capital tax per year is on each scrip or all combined gain .
        Thanks

          All combined bro. Whatever you gained in a year from equity markets.

          It’s 1 Lac long term aggregate profit per PAN number in a year. Does not matter how many scrips you have sold to earn that profit.

    Completely agree with you that hardly we see retails investors having such high-value share in their account. However, it is difficult to predict how many such investors are there who holds less than 10. The Annual Report also doesn’t mention less than 500 shares data.

    Last time also the buyback size was same close to 2000 Cr and very few retailers participated as during the announcement in August 2016 the price of a share in the market was above 23000( buyback price). Hence maybe few people got interested in it. However, this time the difference between CMP and Buyback Price is close to 8%, so more people may be interested to participate.

    Market Wizard Ji,
    I would beg to differ…
    Shares no. wise it may appear small buyback, but cost of 1 share is 21000/- , approx 100 times than the normal share..
    Size wise its 3.78% of total shares is a very good no. considering, high networth of company.
    Request to kindly deep dive for acceptance ratio… Any individual having LESS THAN 10 (TEN) shares would only qualify as retail, while currently 2 Lac category means people having even 1000 shares..
    The issue is that only 5-6% has been left on table by the company..
    But feel acceptance would be 100%…
    Normally retail investor doesn’t get into “SUCH COSTLY SHARE” with current cost nearly 20000

    *Acceptance Ratio will be low*
    New buyers should stay away.as only 1, 54, 000 shares for retailers against current holding of 21 lakh+ at September quarter end.

    At current holding it is only7.32%

        Sorry to jump in.
        2.1 million shares but holders of shares are 68K. Maximum for each share holder would be 9 shares which makes around 612000 shares only resulting in a entitlement of around 25%.

        However, if we take a more realistic approach, a lot of these 68000 shareholders will have more than 9 share in their accounts.
        Assuming only 50% shareholders will have share equal to or less than 9, retail category comes down to 306000 and entitlement improves to around 54%.

        But again, if you consider margin, it is very small as compared to other buybacks plus its a big size share so I don’t expect a huge response from public (even the announcement did not created much impact on the prices, volumes are less.). Therefore, expecting 80% of the people to get into the buyback which improves my acceptance further to around 70%.

        A lot of assumptions have been used, but I still feel those are realistic assumption.

        Thanks

      Reason is probably , that actual retail is one having less than 10 shares…
      people don’t like to hold such HIGH COST Share..

    Bosch held its conference call on 5 November 2018 to discuss its results and future.

    Highlights of the call

    In India, Bosch is a leading supplier of technology and services in the areas of Mobility Solutions,

    Industrial Technology, Consumer Goods, and Energy and Building Technology.

    It registered revenue of Rs 3201 crore in Q2, up 13.8%.

    PBT stood at Rs 641 crore, up 21.8%.

    Other income grew due to higher mark to market gains.

    Tractor segment grew 14%.

    Passenger car grew 4%.

    Profitability growth was on account of higher turnover, improved operational efficiency and higher productivity, which was partially offset by negative exchange rate on material cost.

    PAT stood at Rs 420 crore, up 19%.

    For the six months sales stood at Rs 6413 crore, up 17.5%.

    PBT stood at Rs 1290 crore and PAT stood at Rs 851 crore.

    Bosch Limited’s performance in the first two quarters highlights the company’s continued commitment to delivering best-in-class automotive solutions.

    The company is helping customers to meet the challenge of manufacturing vehicles compliant with BS VI emission standards from April 2020 as recently ruled by the Supreme Court.

    Outlook for FY 2019 remains optimistic.

    The management is glad by the jump in India’s ease of doing business.

    In the past quarter, Bosch has outperformed the industry in business beyond mobility sectors as well.

    As a recognized industry leader in many sectors, the company will continue to present innovations across its business including IoT services and integrated mobility offerings.

    Bosch Limited’s Mobility Solutions turnover increased 12.3% in Q2. The largest contributor were domestic automotive sales which have increased by 15.1%.

    Within the Mobility Solutions business, the Powertrain Solutions division performed especially well, registering double-digit growth of 10.3%.

    The Automotive Aftermarket division grew 20.9% after recovering from impact of GST implementation last year.

    Bosch’s business beyond the Mobility Solutions sector registered a strong growth of 14.3%. The main contributors were the Energy and Building Technology sector and the Power Tools division.

    For H1 sales of the Mobility Solutions sector increased 16.3% whereas business beyond the Mobility Solutions sector witnessed growth of 14.3%

    The Board also approved buyback of upto 1,028,100 equity shares of the company, on a proportionate basis by way of a tender offer at a price of Rs 21,000 per share for an aggregate amount not exceeding Rs 2159 crore.

    Growth in CV was aided by government focus on infrastructure and higher demand from Nepal and Bangladesh. It also grew on the back of new product launches.

    Bosch has, in India, the largest development center outside Germany, for end to end engineering and technology solutions

    Bosch in India employs over 31000 associates.

    The Bosch Group operates in India through thirteen companies.

    Last year the company got hit by GST.

    Bosch is the largest after market player in India. After market grew 21%. There is no reason why it won’t grow well in the future.

    It is a very small Buyback. So no point of participation for this specific purpose. However, as a long-term investor, this is a very good company for investment.