FDC Buyback 2019
(i) A young visionary, Anand Chandavarkar, in the backdrop of India’s independence struggle, dreamed of building a world-class company in 1936. His vision of freedom was to create, to build, and to industrialize, in order to make the nation self-reliant in healthcare. In 1940, this partnership firm was incorporated as a private limited company – Fairdeal Corporation (Private) Limited and in 1986 its name was changed to FDC Private Limited. Thereafter, FDC became a public limited company and was listed on the Bombay and National Stock Exchanges of India in 1996.
(ii) Today, FDC carries forward the flaming spirit of its first dream, achieving accreditations from the US-FDA, UK-MHRA, MCC-RSA, and the UAE, to cite a few.
FDC is a forerunner in manufacturing and marketing of Oral Rehydration Salts (ORS) and Ophthalmics.
FDC has also set-up globally approved, multi-location manufacturing facilities for Active Pharmaceuticals Ingredients (APIs) as well as Finished Dosage Forms. These facilities are located at Roha, Waluj and Sinnar in Maharashtra, Verna in Goa and Baddi in Himachal Pradesh.
FDC markets more than 300 products in India and exports many of these to over 50 countries.
Products of the Company in Glance
Buy Back Offer Deal:
| Buyback Type: | Tender Offer |
| Buyback Record Date: | Jun 07 2019 |
| Buyback Opening Date: | Jul 01 2019 |
| Buyback Closing Date: | Jul 12 2019 |
| Buyback Offer Amount: | ₹ 120.05 Cr |
| Date of Board Meeting approving the proposal: | May 24 2019 |
| Date of Public Announcement: | May 24 2019 |
| Buyback Offer Size: | <10% |
| Buyback Number of Shares: | 34,30,000 |
| Price Type: | Tender Offer |
| FV: | 1 |
| Buyback Price: | ₹ 350 Per Equity Share |
Details of Buyback:
Salient financial parameters:
| Particulars( in Cr) | 2018 | 2017 | 2016 | 2015 |
| Revenue | 1,070.21 | 1,046.02 | 997.44 | 877.65 |
| Other Income | 51.25 | 49.65 | 32.51 | 44.36 |
| Total Income | 1,121.46 | 1,095.67 | 1,029.96 | 922 |
| Expense | 852.51 | 811.36 | 775.28 | 680.9 |
| Net Profit | 168.31 | 187.07 | 156.81 | 145.91 |
| OPM % | 25.13 | 27.18 | 25.53 | 27.47 |
| NPM % | 15.73 | 17.88 | 15.72 | 16.62 |
| Equity | 17.52 | 17.86 | 17.78 | 17.78 |
| EPS | 9.47 | 10.52 | 8.82 | 8.2 |
How to Participate in buyback?
Profit from the buyback on the bases of acceptance Ratio:
| Acceptance Ratio | 33% | 50% | 75% | 100% |
| Amount Invested in Buyback | 1,13,142 | 1,13,142 | 1,13,142 | 1,13,142 |
| No. of Shares buyback | 188 | 285 | 428 | 571 |
| BuyBack Profit | 28,556 | 43,320 | 65,056 | 86,792 |
| Profit | 25.2% | 38.2% | 57.4% | 76% |
Recommendation:
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FGDC 2019 Final Analysis :
1. Buyback Announcement date: 24.05.2019 — Share Price was Rs 199
2. 571 shares bought at Rs 199 means an investment of 1,13,142
3. Retail Acceptance Ratio was 19.34%. i.e. out of 571 shares, 110 shares have been buyback by the company. Profit on Accepted Shares= 16,720
4. 461 Unaccepted shares were given back on 22.07.2019. The price on 22.07.2019 is 158, so if you sell 461 shares at 158, then it is a loss of 18400.
5. Overall we can say a loss of 1720 on FDC 2019 buyback
The AR was bad due to the LTP difference.last time the LTP was around 290 when the buyback was announced.This time it was around 180-190 .Though the amount is same (Rs. 350 / share). So, retail participation was more in hopes of bumper profit.
i got only 73 out of 400 I put for buyback,
is the acceptance ratio so bad?
This time acceptance ratio is so bad.
Nothing profit from this buyback
Why there is no update of bids on bseindia ? Peculiar problem
I am holding 800 shares, and was holding since before Ex-Date but not received any email till now regarding the confirmed acceptance from them, which normally i do.
Can anyone guide if they have received any such email till now or any other info on confirmed ratio of acceptance?
No email received by me as well.
I did not recieve as well. However i have tendered the shares i am holding
I have bought 100 FDC shares on 6/6/19.aml eligible for applying buy back.
No
Rec’d mail
23 shares from 250 shares
I havr nlt recieved any offer letter. My broker is zerodha. How do we know on acceptance ratio. I cannot find anything online.
What is the source for this infomation
FDC BUY BACK OPEN ON 1 JULY TO 12 JULY . ENTITLEMENT IS 69 SHARE OUT OF 749 SHARES HELD .
Hi Market Wizard, any calculation what should be the acceptance ratio based on the retail share holding before ex-date ? Plz suggest.
Nos that record date is passed wht will be the expected acceptance ratio and any news on tender open date?
@market wizard please suggest on what rate of share is small retail investor is considered..is it the buyback price, avg rate at which shares are bought or closing price of share on record date
Highest volume price on the record date.
Ok great..now i am relaxed 🙂
If your broker is zerodha then you ll not eligible for buyback if you sold on 6th Jun. I.e., ex date. Even I was shocked. I sold for a loss and I don’t even get the benefit of buyback.
Why is that
This is incorrect.
whichever broker it is, if you sell on ex-date, you are eligible for buyback
Read this bro:
https://support.zerodha.com/category/trading-and-markets/corporate-actions/articles/sell-stock-on-ex-date
You are not eligible, as I have observed that zerodha debits(sell leg) the share on a T+1 basis but credits(buy leg) them on T+2 basis from your demat account .So, if you sell on ex-date your demat account will be debited on the record date.Thereby you lose your eligibility for buyback.
@market wizard…i did a big mistake in my basic calculations. With buyback proce of 350 my holding on record date is more than 2lacs. I thought that on cmp the invetor will be decided as small investor or big. So i wont qualify for small retail investor. Can you suggest what will be the acceptance ratio for holder more than 2l at biyback proce of 350. On my average buy price my holding is 190000.
Share closing price on record date * nos of shares held if is below 2 lacs than you are considered as retail
But as per the calculation done by market wizard on all shares for buyback the buyback price is considered.
You will get to know after you receive email. Till than relax, whatever i said is correct from my previous experience
Ok…lets hope so
@market wizard can you confirm
I bought 500 shares of FDC on 4th June and sold them all on Ex date 6th June. Will I be eligible for buyback if I buy shares when the tender window opens?
yes
Hi MZ, Link you shared above: https://support.zerodha.com/category/trading-and-markets/corporate-actions/articles/sell-stock-on-ex-date is insightful but in the end there is not in this article it states
Note: You will not be eligible to participate in buyback/takeovers if you have sold shares on the ex-date.
If your broker is zerodha then you ll not eligible for buyback if you sold on 6th Jun. I.e., ex date. Even I was shocked. I sold for a loss and I don’t even get the benefit of buyback.
I sold the FDC shares yesterday (6th Jun), will my shares still be considered for BB?
I am planning to sell half of the shares tomorrowi.e. on record date because I think once tender is open the rate will be higher then the rate of shares on record date.
so assuming I have 100 shares on ex-date and I sell 50 shares on record date and assuming the company has acceptance ratio of 50%. So Can I tender all the 50 shares that I hold. Also, in case acceptance ratio is more than 50% I will buy the remaining shares and if it is less then 50% then I will share theexcess shares once tender is open.
Can members suggest whether this approach is good to avoid loses.
Sell the excess shares*
Market wizard ji….pls suggest whether this approach is right or not…i have sold half of my shares and i will either buy or sell remaining shares based on acceptance ratio when tender is open. So in case acceptance ratio is 50% so can i tender all that i am holding today
1. Let us suppose you were holding 100 shares on the Record date.
2. After the record date, you have sold 50 shares.
3. In case AR is 50%, You can either buy 50 more shares from the Market again and tender all 100 shares. In this case, 50 nos. of the shares will be accepted.
4. Or even if you don’t buy anything and tender only 50. In this case, also 50 no of the shares will be accepted.
Down by 8%. Ex-date effect.
Please clarify my doubt..
I bought shares of FDC on 03/06/19. If I sell these shares on 10/06/19 and buy the eligible shares after the announcement by the company, will I still be allowed to participate in buyback?
Thanks in Advance
Yes.
I wish to buy 10 shares now and sell it back to company during buyback…..can I sell all my shares or only few will be accepted. If I tender it as soon as buyback starts only…will all 10 shares be accepted for buy back.
Not all
They will be accepted as per acceptance ratio
I wish to buy 10 shares and sell it in buy back. Will I be able to sell all my shares or only part of it…or can I apply it on 1st day so the it’s taken into account to buy it
Can be bought at CMP with a strict stop loss of 185. 6th June is the Ex-date.
Thanks Market Wizard. I bought 142 shares @197 price. I plan to sell on record date and then buy eligible number of shares once tender is open. Requesting your suggestion on this.
Ex date is jun 06
Yes. Sry for the mistake.
I bought 88 FDC shares on 29th May at 195. If I sell them on 6th Jun will I get the benefit of buyback. Thanks in advance market wizard ji.
Yes.
Last year when they announce buyback price is around 270.
This year 190
Please suggest
Apply or not
Yes, can apply.
Can this buyback is in favour of investers
Price is already 210
Should we buy
buy around 170 ….
Will it come near 170
It is at 200
Yes, please let us know at what price we should enter for Buyback.The rating is 4 so is it a good idea to enter only for Buyback.
It can easily give 10% return in the short term. Do not play for buyback as issue size is very small and AR won’t be good.
Last year also promoters have participated in the buyback and we can accept the same this year also.
The company is not growing much, so to reward the investor the company is doing a buyback every year.
Last year the size and price was the same as this time
The Board of Directors of FDC Limited in their meeting held on February 07, 2018 had given their approval for Buy Back of the Company’s fully paid-up equity shares of Re. 1 each from the Tender offer through Stock Exchange route, of up to 3,430,000 fully paid up equity shares of the face value of. 1 each of the Company at a price of Rs. 350/- (Rupees Three Hundred Fifty only) per Share payable in cash for an aggregate Buyback consideration not exceeding Rs. 120.05 Crores
Acceptance Ratio last year
Reserved category for Small = 64( By Mistake initially I showed 13%. I overlooked the figures. )
A general category for = 12%( By Mistake initially I showed 1.67%. I overlooked the figures. )
Please check it here https://d2un9pqbzgw43g.cloudfront.net/main/FDC-Buyback-2018.png
Last year the buyback was announced on 09.02.2018 with Record date on 27.02.2018. The buyback was opened on Monday, March 12, 2018, and closed on Friday, March 23, 2018. So within one month, they have finished the buyback.
IS AR number correct. the Post Buyback announcement has very different number from what you have mentioned.
Please make me correct.
subscription was 1.55 times which makes close to 67% acceptance. Unlike HEG there were not many who subscribed so minimal chance of single share acceptance. I dont have the actual acceptance data so trying to understand where i am going wrong.
Yes, sorry I overlooked a figure in my calculation. You are right the Retail AR was 64%. I have corrected it.
Buyback route —————— Tender offer
Total buyback amount ——– Rs. 120.05 Crores
Buyback price ——————- Rs. 350/-
Total buyback shares ——— 34,30,000
Record date ——————– June 07, 2019, Friday
FDC Limited has Net Worth of 1276 Cr as on March 2018. Maximum size of the buyback as per SEBI is 25%.
Pros:
(i) The company is virtually debt free.
(ii) The Current ratio is 3.72( Anything above 2 is quite comfortable)
Cons:
(i) The Revenue growth in the last 3 years is mere 4.98%.
(ii) Having inconsistency in Bottomline in the last 3 years.