Dwarikesh Sugar Industries Limited Buyback 2024

Industry Leadership: Dwarikesh Sugar Industries Limited is a premier entity in the Indian sugar industry, known for producing the finest quality sugar and a range of allied products. The journey began with the establishment of its first sugar plant with a capacity of 2500 TCD in the Bijnor district of Uttar Pradesh, marking the start of a remarkable growth trajectory.

Diversified Portfolio: Beyond sugar, the group has successfully diversified into the production of ethanol and industrial alcohol, showcasing its versatility and innovative approach.

Strategic Locations: The company operates three state-of-the-art manufacturing facilities in Uttar Pradesh, located at Dwarikesh Nagar (Najibabad), Dwarikesh Puram (Afzalgarh) in Bijnor district, and Dwarikesh Dham, Tehsil Faridpur in Bareilly district. With its headquarters in Mumbai, the group is led by a visionary leadership team that upholds a legacy of excellence.

Capacity and Expansion: The group boasts a combined sugar production capacity of 21,500 tons per day, reflecting its significant scale and the ability to meet substantial market demand.

Innovative Milestones:

2004 Expansion: Launched a modern 7500 TCD sugar plant with 9 MW power generation in Afzalgarh, Bijnor.

2007 Expansion: Opened another advanced 7500 TCD sugar facility with 36 MW power in Bhagwanpur Phulwa, Faridpur, Bareilly.

Co-generation Boost: Enhanced Dwarikesh Puram’s power capacity from 9 MW to 33 MW, emphasizing sustainability and efficiency.

Buy Back Offer Deal:

Buyback Type: Tender Offer
Buyback Record Date: Mar 20 2024
Buyback Opening Date: Mar 27 2024
Buyback Closing Date: Apr 03 2024
Buyback Offer Amount: ₹ 31.5 Cr
Date of Board Meeting approving the proposal: Mar 08 2024
Date of Public Announcement: Mar 08 2024
Buyback Offer Size: 1.59%
Buyback Number of Shares: 30,00,000
FV: 1
Buyback Price: ₹ 105 Per Equity Share

Details of Buyback:

The proposal to buyback not exceeding 30,00,000 (Thirty Lakhs) equity shares of the Company (representing 1.59% of the total number of equity shares in the paid-up share capital of the Company) at a price of Rs. 105 (Rupees One Hundred and Five Only) per equity share payable in cash for an aggregate consideration not exceeding Rs.37,18,75,000 (Rupees Thirty Seven Crores Eighteen Lakhs Seventy Five Thousand Only).

Salient financial parameters:

Particulars (In Cr) Mar 2019 Mar 2020 Mar 2021 Mar 2022 Mar 2023
Sales + 1,084 1,336 1,839 1,979 2,103
Expenses + 955 1,200 1,638 1,688 1,890
Operating Profit 129 136 201 291 213
OPM % 12% 10% 11% 15% 10%
Other Income + 36 5 7 3 15
Interest 21 33 48 32 26
Depreciation 33 37 41 44 50
Profit before tax 111 72 120 219 152
Tax % 14% -3% 24% 29% 31%
Net Profit + 95 73 92 155 105
EPS in Rs 5.05 3.9 4.86 8.24 5.57
Dividend Payout % 20% 26% 26% 24% 36%

How to Participate in buyback?

1. Firstly, to be eligible for the buyback the investor should have shares of Dwarikesh Sugar Industries Limited in Demat or physical form as on the record date [20-03-2024]. 2. Once you have shares in Demat, you can participate in the buyback process which is opening from [27-03-2024] by selling your shares through your broker on NSE or BSE. 3. Then on [03-04-2024], 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 1904 Shares at CPM of Rs. 81 (2,00,000/105)
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback 1,54,224 1,54,224 1,54,224 1,54,224
No. of Shares Buyback 628 952 1428 1904
Buyback Profit 15,072 22,848 34,272 45,696
Profit% 9.77% 14.81% 22.22% 29.63%


      15 for 1000 !! It is not even the declared 1.59 percent. Knew it was going to be bad. Never thought that it would be this much worse. Pity those who participated.

        With public shareholding at more than 50% and small absolute size of buyback, it is not surprising that ER for small shareholders is the same as for general. Weighted average ER between the two categories will always be slightly less than % declared size and the balance shares will go into the excess quota.

        The price of the share has not fallen too drastically . I think those who bought the stock for the long term after doing due diligence on fundamentals would not be too unhappy. If the market turns and segment for the sector improves, they might still come out ahead. However, buying just with the intention of a fast buyback profit might not work out, as it often doesn’t.

    What could be the ER and AR and is it advisable to go for this buyback?

    What will be the eligibility ratio and approx. acceptance ration. Is it worth to buy at current price for buy back and will we get profit in this deal

      Certainly not worth. Most likely to be in loss like Dhampur Sugar, Orbit Export and the likes.

    Size-31.50 Crore (1.59%)
    Shares to Buyback-30 Lakh
    Record Date-20/03/2024

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