Eclerx Service Limited Buyback 2019

eClerx was founded in 2000 by Anjan Malik and PD Mundhra with the goal of transitioning, managing and transforming complex business processes. Following successful careers in investment banking, Anjan and PD, graduates of University of Pennsylvania’s Wharton School of Business, jointly identified significant opportunities for providing innovative services and solutions to large global companies undergoing rapid business transformation challenged by legacy systems, new technology, data inaccuracies, and ever-changing processes and workflows. Created from humble beginnings in a small office in Mumbai, today eClerx employs over 9000 people with offices located in the US, UK, India, Italy, Ireland, Thailand, and Singapore.

Buy Back Offer Deal:

Buyback Type: Tender offer
Buyback Record Date: May 10 2019
Buyback Opening Date: May 31 2019
Buyback Closing Date: Jun 14 2019
Buyback Offer Amount: ₹ 262 Cr
Date of Board Meeting approving the proposal: Mar 14 2019
Date of Public Announcement: Mar 14 2019
Buyback Offer Size: 24.95%
Buyback Number of Shares: 17,46,666
FV: 10
Buyback Price: ₹ 1500 Per Equity Share

Details of Buyback:

The Board of Directors of the Company at its meeting held on 14.03.2019 has interalia approved a proposal to buy back up to 17,46,666 Equity Shares of the Company, being  24.95% of the total paid up equity share capital and free reserves of the Company, for an aggregate amount not exceeding Rs.262 Crores at Rs. 1500 under the "Tender offer" route using the stock exchange mechanism

How to Participate in buyback?

1. Firstly to be eligible for the buyback the investor should have shares of Eclerx Service Limited Buyback 2019 in demat or physical form as on record date [10.05.2019 ]. 2. Once you have shares in demat, you can participate in the buyback process which is opening from [ 31.05.2019 to 14.06.2019 ] by selling your shares through your broker on NSE or BSE. 3. Then on [ 24.06.2019 ], 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 133 Share at CMP of Rs.1132 [2,00,000/1500=133 )
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback 1,50,556 1,50,556 1,50,556 1,50,556
No. of Shares buyback 43 66 99 133
BuyBack Profit 15824 24228 36432 48944
Profit 10.56% 16.09% 24.19% 32.5%

Recommendation:

Review and Recommendation of Eclerx Service Limited Buyback 2019 by IZ team is: 4/10 Fair: 1-5 Good:5-7 Excellent: 7-10 [ There is an upside of 37% from CMP of 1165 however, the size of the buyback is small and AR won't be more than 20% unless price moves appreciably closer to buyback price. ]

    I participated in this buyback as per my Advisor guidance, and bought 20 shares at about Rs. 1140 per share.
    After the cutoff date (I think 10 May), the share price dropped by 200 points to around 950, on a single day.
    Why this sudden drop in price? Which people gaining from it?
    As per my Advisor 25% was the buyback quantity. Accordingly 5 stocks from 20, should have been
    picked for buyback.
    However, only 3 share were picked for buyback and I got the buyback amount as Rs. 1150.
    Now at current date share has been dropped by 50% to around 450-475 range.
    And I see a loss of around 11,150 against the buyback amount of 1,150.
    Hence, I think this buyback was not planned with a right mindset
    Should it be enquired by SEBI or any similar organisation?

    Acceptance ratio always varies (exception for 100%) to each shareholders as per holding & no of shares tendered.
    eg.
    Holding —- Tendered —– Accepted —— Ratio
    — 1 ————– 1 —————- 1 ————- 100%
    — 4 ————- 4 —————- 1 ———— 25%
    — 10 ———— 10 ————— 1 ———— 10%
    — 40 ———- 40 ————— 5 ———— 12.5%
    — 40 ———- 10 ————— 5 ———— 50%

    Out of 32 shares tendered 5 got accepted in 1 account.

    and in another account 1 share got accepted against 5 tendered

    so got an acceptance of 25% also and 15.62 % also

    I bought one share in 12 accounts at 1150 rupees.
    Today, the company has taken 1 share buyback in the buyback

      I think it’s 12.5%. I received message from my broker that for 40 shares that I was holding 5 has been alloted.

            in between what do you think is going wrong with the stock.. Gone till 770 levels today.. is there some issue that could potentially be coming up soon. ?

    From where u all guys got the AR news. There is no announcement declared by Co. in BSE

    AR will be 26% confirmed news. Do Not spread wrong figure like 16% or 17%

    ECLERX acceptance ratio is around 16%(RETAIL) for it’s BUYBACK.
    Their acceptance ratio regarding people who applied with 1 Share, is 100%.
    Fwd

    What will be tentetive date to know how much shares accepted in buyback ?

    Eclerx is heading towards 700 post buyback. don’t rush to buyback your accepted shares immediately. Patience is the name of the game.

      Anything can happen dear. I can see strong bounce back from this level as chart is indicating upward trend with resistance of 945/969/985 /1012

      Rajesh, seems your prediction is soon going to be fulfilled.. Already near your target..

    After referring buyback bid details on BSE can any one explain how many shares will absorb ?

    Hi NSE is not participating in BUYBACK what can I do?
    I have no trading a/c in BSE.

    Mw sir I have 4 eclarx share in my demat ac on record date and company give zero entitlement
    What should I do

      Actually, the entitlement for the Retail category is less than 25%. So you are not eligible. Had you were holding more than 8 shares then you would have got entitlement for 1 share.

      Still you can participate by offering all the shares. You may get a chance. Contact your demat Holding entity.

    Hi, I have not received any email Or entitlement letter. Did anyone receive it?

    BUYBACK —– 2019 —– STOCK PRICE MOVEMENT
    ============================================
    Buyback no. of shares — 1746666
    Buyback price — 1500
    ————————————————————————————————————— stock price
    ————————————————————————————- March 01, 2019 ——- 1053.75
    Board meeting to approve the proposal for Buyback ————— March 14, 2019 ——– 1145.95
    Public Announcement for the Buyback ——————————— April 26, 2019 ———– 1132.65
    Last day to eligible for Buyback —————————————— May 08, 2019 ———– 1099.70
    Ex-Date ———————————————————————— May 09, 2019 ———— 998.30
    Record Date —————————————————————— May 10, 2019 ———— 995.40
    Buyback opens ————————————————————— May 31, 2019
    Buyback closes ————————————————————– June 14, 2019
    Last date of settlement of bids —————————————— June 24, 2019

    Entitlement (small shareholders) — 11 out of 83 (13.2601%)
    Entitlement (General) — 4 out of 99 (4.0394%)

    BUYBACK —– 2018 —– STOCK PRICE MOVEMENT
    ============================================
    Buyback no. of shares — 1290000
    Buyback price — 2000
    ————————————————————————————————————– stock price
    —————————————————————————— December 1, 2017 ——– 1,379.30
    Board meeting to approve the proposal for Buyback ——— December 22, 2017 —— 1,494.10
    Public Announcement for the Buyback ————————– January 23, 2018 ———- 1,559.55
    Last day to eligible for Buyback ———————————– February 1, 2018 ———- 1,558.45
    Ex-Date —————————————————————– February 2, 2018 ———- 1,481.30
    Record Date ———————————————————– February 5, 2018 ———- 1,434.55
    Buyback opens ——————————————————– February 22, 2018 ——– 1,353.65
    Buyback closes ——————————————————- March 8, 2018 ————– 1,357.20
    Last date of settlement of bids ———————————– March 13, 2018 ————- 1,337.90
    —————————————————————————- March 28, 2018 ————- 1,201.50
    —————————————————————————- April 30, 2018 —————- 1,334.30
    —————————————————————————- May 31, 2018 —————- 1,321.65

    Entitlement (small shareholders) — 6 out of 47 (12.7869%) ———- response — 544.72%
    Entitlement (General) — 6 out of 211 (2.8550%) ———————— response — 798.21%

    BUYBACK —– 2016 —– STOCK PRICE MOVEMENT
    ============================================
    Buyback no. of shares — 1170000
    Buyback price — 2000
    ————————————————————————————————- stock price
    —————————————————————————–01-Aug-16 ———- 1529.30
    Board meeting to approve the proposal for Buyback ——– 29-Aug-16 ——— 1623.30
    Public Announcement for the Buyback ————————- 14-Oct-16 ———- 1517.10
    Last day to eligible for Buyback ———————————– 26-Oct-16 ———- 1671.05
    Ex-Date ——————————————————————27-Oct-16 ———- 1499.90
    Record Date ———————————————————– 28-Oct-16 ———- 1518.10
    Buyback opens ——————————————————- 28-Nov-16 ——— 1496.25
    Buyback closes ——————————————————- 09-Dec-16 ——— 1488.30
    Last date of settlement of bids ———————————— 21-Dec-16 ——— 1377.90
    —————————————————————————- 30-Dec-16 ——— 1400.00
    —————————————————————————- 31-Jan-17 ———- 1511.50
    —————————————————————————- 28-Feb-17 ——— 1348.05

    Entitlement (small shareholders) — 22 out of 123 (17.8862%) ———– response — 327.83%
    Entitlement (General) — 8 out of 321 (2.4924%) ————————— response — 881.65%

    Dear all, kindly guide the procedure for tendering the shares for buyback. I have seen tender form on my mail. Is it compulsary to send this form after filling to the Karvy after tendering the shares on Zerodha ? Kindly guide.

    I had 94 shares of Eclerx and on ex-date (when the shares value fell down from 1100+ to less than 1000), I sold 64 shares. I was thus sure that my entitlement should be decided on basis of 94 shares.
    But, today I received the letter stating that as on record date, i had 30 shares and my entitlement is 3 shares.
    Similar thing happened with Quick heal also. I had 630 shares on ex-date and sold 330 shares the day when share price fell fell from 230 odd to sub 200. I got the letter stating that my entitlement is on basis of 300 shares.
    Could someone be kind enough to explain this? My broker is Zerodha. Is it a problem at its end??

      Yes, it is a problem of a broker only.

      Zerodha is a reputed broker and they are messing it up. Very sad.
      Is there any grievance mechanism?

        I had the same issue with HDFCSec. If you seel anything on the Ex Date you would not get the entitlement because the shares are getting debited the same day from your Demat account.

        Yes. You can file a grievance with Zerodha. If they don’t respond then you can take it up with NSE. You will win the award.

      Suresh, buyback record date was on May 10th. What date did you sell the shares?

    Finally some good news for this stocks , results are good no doubt . This should now move towards 1000 also acceptance ratio likely to be around 30% now .

    Entitlement
    =========
    Reserved category (Small Shareholders) —- 11 out of 83 (13.26%)
    General category ———————————— 4 out of 99 (4.03%)

    Dispatch of Letter of Offer ————– May 27,2019 Monday
    Buy-Back Opens on ——————— May 31,2019 Friday
    Buy-Back Closes on ——————— June 14, 2019 Friday
    Last date of receipt of completed Tender forms —- June 18,2019 Tuesday
    Last date of settlement of bids on the Stock Exchange* —– June 24, 2019 Monday

    * Such activity may happen on or before the respective last dates

      Are you sure its 13.25 percent as some users posting 11 percent letter.

    Q4: Profit jumps to Rs 59.2 crore versus Rs 39 crore; revenue rises to Rs 365.1 crore versus Rs 357.63 crore YoY.

    MW kindly if possible inform about 1 share holder in eClerx..

    Is there ans chances to b accepted in BB…

    Isnt it same as HEG?

      It wont be eligible only on proportionate basis few will accepeted. Rest all wont eligible. Its all about i think random basis.

    Its a good result that they maingain growth. YoY profit down but QoQ its excellent.
    Stock already punished from 1350 level from MARCH 2018.
    We can expect a strong rally tomorrow.

    66,509 Shareholders for this buyback. In March 2019 the number of Public Shareholders was 35440. Not many shares would be accepted beyond entitlement again this year.

      Its not like that look at the share holder pattern for retail individual.
      1 share will not be eligible for buy back. So many of them will sideaway and min. approx 30 percent will be accepted as per my calculation.

        Person having 1 share is pretty much eligible. People having just 1 share would have the next priority to those having firm entitlement. No additional shares would be taken from people having firm entitlement over their entitlement till people having zero entitlement and those who have tended have their shares accepted. Explained clearly in Page 27 of prospectus.

        “On account of ignoring the fractional entitlement, those Small Shareholders who hold 7 (Seven) or less Equity Share as on Record Date will be dispatched a Tender Form with zero entitlement. Such Small Shareholders are entitled to tender Additional Equity Shares as part of the Buy-Back Offer and will be given preference in the Acceptance of 1 (One) Equity Share, if such Small Shareholders have tendered Additional Equity Shares. The Company shall make best efforts subject to SEBI Buy-Back Regulations in accepting Equity Shares tendered by such Eligible Shareholders to the extent possible and permissible “

      The entitlement ratio in HEG was also 10%..

      In HEG 1 share holder got entitlement mail for 0 share..but final acceptionce rationfor 1 share holder was 17:25

    Stock is not operating much.. I may suffer a huge loss in this buy back.

      Me too not received entitlement email yet, is it circulated to you now?

    @MW: What do you think, should we buy it now? Because once the letter are issued the price will increase approx. 5-10%?

      Don’t jump anything now before the election. The market is in full control of Bears. The BJP coming in the majority is a big question mark.

      It’s pretty obvious now that no one will make money in this buyback. Previous buyback’s story is going to get repeated.

      MW – please advise how one can reduce losses at least

    I had only 20 shares and sold yesterday at loss of 100 rupees per share. Expecting 25% AR, shall I buy 5 shares now?

    Its impossible to zustain level of 1100
    Look out scenario
    Today it crunch 100rs. Time Purely operator base no traders available to short or buy. I If only they want to recover their price then only we can see upward.
    Still hoping final AR will be 25% to 30% minimum due to lack intrest in retail segment. Thats why stock punish heavily.

    Once buyback will start and offer letter received it will again reach 1100 , so dont do any more panic sale now .

    70000 shares reserve extra for buyback than last year so one can assume final AR will be 25 to 30 percent.

      Even at current price and expected acceptance of 30 percent. the fall in stock price erodes any gain made in tendering shares. This happened last two times as well. Buyback was really good for people who bought shares around Rs 1000. People who bought above Rs 1125 might just break even if the price damage is limited from here. Company has been posting poor results quarter after quarter which is not helping investors.

    Stock tumble 7 % in pre open no chance for even arbitrage. Hope will recover from this level.

    I have bought 15 shares last month. Can I sell it today (May 9th) and buy back when it gets lower?. Will I be still eligible for buyback? Please let know.

    Everyone is buying 1 share in avcount as i can see numvers of trade for 1 share. I hope it will not be punnish like HEG.

    Better to exit , I feel , even before record date it looks bearish , price may fall substantially after record date and my never recover in medium term .

    Eclerx last day to take exit if bought for buyback till tomorrow else history should repeated

    Not moving till date

      You mean we should exit from the position today and tomorrow if one has purchased for the buyback??

        Yes. Please observe fall in share after record date.

      Record date is 10th may, if we want to consider for buyback then atleast for tomorrow T – 2 we need to hold the stock …pls correct me if not correct

        Yes. On 9th you can sell or I would say you sell.

          Got it Thanks MZ..just want to ensure i have purchased eclerx share yesterday and as suggested if i sell it tomorrow, will it be considered for buyback?

            First, it has to be in your demat to sell. It takes T+2 days to reflect. so if you have purchased on 7th it will reflect 7th(T), 8th(1) , 9th (1).

          I had sold 64 Eclerx shares on 9-May-2019 as per your post above. My balance before selling was 94 shares and after selling was 30 shares.

          I got entitlement of 3 shares based on 30 shares only, and not 94 shares.

          Has anyone else faced a similar issue, as many people may have sold out on 9-May-2019?

          This is a forum of highly learned and experienced people and novices like me want their guidance, so that decisions do not lead to financial losses in buybacks by way of less shares being shown on record date.

    If we buy more than 1 share suposs 5 shares than how much will go on buy back?…

    Or its safe to buy only one share?

    Buy-back price reduced to 1500rs but not the amount (262cr). So total buy-back share increased to 17,46,666. Final acceptance ratio will be more that what is calculated here. Hopefully around 30-40%!!

    Total number of shares to be bought back in the Buy-Back shall be upto —- 17,46,666

    Buyback Price is 1600. Current Market Price is 1135. So per Share arbitrage is 465.

    Buy 1 share from 10 accounts that mean an investment of 1135*10= 11350

    If 1 share get accepted as happened in the case of HEG, then we can easily get 465*10= Rs. 4650 with minimal risk of 11350.

      Hello, a beginner here, so pardon my question. By 10 accounts do you mean 10 unique pan numbers or 10 accounts with one PAN and different brokers?

    THIS IS VERY POOR MANAGED COMPANY EITH NO INTENTION TO REWARD IN BUYBACK,LAST TIME IN BUYBACK I INCURRED LOSS OF 2 LAKH AFYRT PURCHASING 600 SHARES IN 6 DP,STAY AWAY AS LAST TIME BUYBACK CAME AT @ 2000,NOW IT IS FOOLING PUBLIC WITH @ 1600

    Anurag, I have factored transaction cost of Rs 80 in this. Time value of money on Rs 1150 for 3 months is Rs 40. Still you can earn Rs 360 per account.

    I have 100 shares eclerx.. So how many shares will the company take in the buyback.

      You can be sure that company will take 5 shares out of hundred. This buyback will take at least one and a half month to record date. If more people buy for arbitrage then chances of a higher acceptance go down.
      The problem with company is poor results with every result profit is eroding and share price goes down. People bought shares at about 1500 last buyback and with acceptance of 15 out of hundred they had to sell remaining at less than Rs 1200.
      The loss in unaccepted shares was more than profit in accepted shares of this company in last two buybacks.
      This time could be different

        SHAREHOLDER WILL NOT GET REWARD IN BUYBACK,AFTER BUYBACK ONE HAS TO READY FOR CRASH IN SHARE PRICE,BE CAUTIOUS IIN THIS MARKET,LOT OF CHEATER COMING OUT WITH SCHEME

      It’s the same situation. Everytime there’s a new set of investors who are falling prey

    I could check that ratio of 2.1% in the case of Tech Mahindra mentioned in Buy Back details has been correctly arrived at as I suggested earlier

    Normally we calculate ratio % of buck back as portion of existing paid up equity shares which comes to 4.24% only as indicated in all earlier buy backs. Looking to that ratio should be mentioned.

      What about transaction cost? You have any idea of time value of money either?

    Buy back ratios of 24.95% and 24.99% mentioned above under the heading Buy back offer deal and Buy Back offer Details respectively seem to be wrong and so may give wrong information to investors having access to your website and could also result in wrong decisions causing avoidable loss which need to be changed immediately.

    Actual ratio of buy back comes to 4.24% taking into account offer for buy back of 16,37,500 shares out of total paid up equity capital of Rs.38.63 crores i.e. about 3.863 crore shares of Rs.10/- each.
    Kindly clarify and change if the same is found in order.

      The wrong entry of 24.99% has been changed now to 24.95%. The size of buyback can be looked into two ways:

      1. Buyback Size in comparison to fully paid Up Equity
      2. Buyback Size in comparison to Fully-Paid Up Equity and Free Reserves based on last audited FY.

      As per SEBI rule, the size of buyback size can’t be more than 25% of the Fully Paid-up Equity and Free Reserve.

      Here we are mentioning the buyback Size, it means it is in proportion to Fully paid up Equity and Free Reserve and Not in conjunction with the size of equity.

    The size of this issue and the gains look handsome. The quantity traded yesterday wasn’t significantly higher. Difficult to understand. Your opinion MW ji

    Market wizardji
    please advice
    Eclerx kis price per purchase kare jo fair value ho

      In Most of the Buyback, the strategy should be:

      By half quantity as soon as buyback announce and then wait for the record date to announce. As soon as they announce the Record date of the buyback, buy another half quantity only if it doesn’t move very close to buyback price. Sell everything on Ex-date. Then wait for Entitlement to announce, once it is announced then again buyback the quantity equivalent to Entitlement for tendering in the buyback.

      OR
      Most of the times investors only buy shares for the purpose of the buyback only when Record date is announced as it reduces the risk considerably.

      See my analysis under Ajanta Pharma Buyback how buying after record date announcement had given handsome returns.

    Note Of Caution:

    The Dec-18 quarter saw a deep fall of 33% YoY Profit. So financial Trend is negative and valuation are expensive. So limited upside from CMP as far as valuation and fundamentals are concerned.

    Last year they did the buyback in Jan 2018.

    Size of buyback = 262 Cr
    Fv=10
    Price= 2000
    CMP on Announcment= 1600
    No.of Shares buybacked= 12,90,000
    Final AR = 18.90%

    The Share price fell considerably due to the prevailing poor market condition after the introduction of LTCG in the budget and the whole equity market got the beating. That is why AR was low.

    This time if BJP comes in power, the share market will boom and so this can give a good opportunity if the market remains positive in the next three months.