Frontline Securities Limited Buyback 2019

FSL was established in 1995 and subsequently listed on the Delhi Stock Exchange and later at Bombay Stock Exchange. We offer a wide range of services intended to make investment planning and its execution convenient for our clients, without compromising on their level of control. We engage primarily in mutual fund distribution and our extensive expertise in this field enables us to provide professional, knowledge-based service.

Frontline Securities Ltd offers the following financial services to help you plan and execute your investment needs based on your risk-return requirements.

a) Wealth Management b) Mutual Fund Distribution c) Corporate Advisory d) Tax Planning e) Mergers and Acquisitions f) Life Insurance

Buy Back Offer Deal:

Buyback Type: Tender Offer
Buyback Record Date: May 24 2019
Buyback Offer Amount: ₹ 7.56 Cr
Date of Board Meeting approving the proposal: Mar 26 2019
Date of Public Announcement: Mar 26 2019
Buyback Offer Size: 24.99%
Buyback Number of Shares: 1890027
Price Type: Tender Offer
FV: 5
Buyback Price: ₹ 40 Per Equity Share

Details of Buyback:

The Board of Directors has unanimously approved the proposal for Buy Back of fully paid up equity shares of Rs. 5/- each, of the company ("Buy Back") from the existing Equity Shareholders of the company as on record date which will be announced in due course of time, on a proportionate basis through "Tender offer, at a price of Rs. 40/- (Rupees Forty Only) per equity share (BuyBack price,), aggregating to an amount not exceeding Rs. 7,56,01,0801 ("offer size") (being 24.99% the total paid up share capital and free reserves as on March 31, 2018).

Salient financial parameters:

Year Revenue(Cr) PAT(Cr) Outstanding Shares(Cr) EPS
FY16 4.80 3.54 0.719 4.93
FY17 5.60 4.5 0.719 6.26
FY18 12.96 9.96 0.593 14.13
9MFY19 4.49 3.5 0.593 5.34

How to Participate in buyback?

1. Firstly, to be eligible for the buyback the investor should have shares of Frontline Securities Limited Buyback 2019 in demat or physical form as on the record date [ 24.05.2019 ]. 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 5000 Share at CMP of Rs.38.5 [2,00,000/40=5000 )
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback 1,92,500 1,92,500 1,92,500 1,92,500
No. of Shares buyback 1650 2500 3750 5000
BuyBack Profit 2475 3750 5625 7500
Profit 1.28% 1.9% 2.9% 3.89%

Recommendation:

Review and Recommendation of Frontline Securities Limited Buyback 2019 by IZ team is: 2/10 Fair: 1-5 Good:5-7 Excellent: 7-10 [ There is an upside of only 3.89% from CMP of 38.5. So arbitrage is very low as compared to the risk of holding the investment for 1-2 months. However, as  the price is near to buyback the AR would be high.]

    Frontline securities board approved buyback at 40 RS.