Dalmia Bharat Limited Buyback 2020

(i) Founded in 1935 by Jaidayal Dalmia; the cement division of Dalmia Cement Bharat Limited (DCBL) (formerly known as Odisha Cement Limited) CIN: L14200TN2013PLC112346 was established in 1939 and enjoys a heritage of 70 years of expertise and experience. It has headquartered in New Delhi with cement, sugar, travel agency, magnesite, refractory and electronic operations spread across the country.

(ii) The Dalmia Bharat Group had established four cement plants in pre-independence years, two of which were affected by the partition and Independence. The two remaining plants operate as Dalmia Cement and we have an associate company which is Orissa Cement Limited (OCL). Managed by a professional team, we have sustained the path to innovation and growth for seven decades.

Buy Back Offer Deal:

Buyback Type: Open Market
Buyback Opening Date: Apr 03 2020
Buyback Closing Date: Oct 01 2020
Buyback Offer Amount: ₹ 500 Cr
Date of Board Meeting approving the proposal: Mar 21 2020
Date of Public Announcement: Mar 21 2020
Price Type: Open Market
FV: 2
Buyback Price: ₹ 700 Per Equity Share

Details of Buyback:

Dalmia Bharat Limited has informed BSE that in the meeting of the Board of Directors of the Company held on 21.03.2020, has approved a buyback of shares worth Rs. 500 Cr from Open Market at a price not exceeding Rs. 700 per share. The total outflow from the Reserve of the company would be 620 Cr. That means 120 Cr will be given to govt. as buyback tax.

Salient financial parameters:

Particulars(in Cr) Mar-17 Mar-18 Mar-19
Sales + 7,444 8,579 9,480
Expenses + 5,550 6,543 7,538
Operating Profit 1,894 2,036 1,942
OPM % 25% 24% 20%
Other Income 296 274 244
Interest 856 708 551
Depreciation 1,226 1,213 1,296
Profit before tax 108 389 339
Tax % 69% 25% -3%
Net Profit 44 292 308
Source: Screener.in

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: “Dalmia Bharat Limited Buyback 2020” announces the buyback plan of its shares up to the price of Rs 700, it means that the company will be purchasing shares of "Dalmia Bharat Limited Buyback 2020" from the open market at a price not exceeding Rs.700 per share. Scenario 1- If the share price is below Rs.700 in that case, the company will put buy orders at the current market price and purchase shares. Scenario 2- If the share price is above Rs. 700, in that case, the company will put buy order at Rs. 700 only and if someone is ready to sell at Rs.700 or less then the only company will get back shares.

Profit from the buyback on the bases of acceptance Ratio:

NA as it is open market buyback.

Recommendation:

It is an open market buyback.