Gandhi Special Tubes Limited Buyback 2021

Gandhi Group is producing auto parts since 1959. The items are advertised all over India and are likewise traded everywhere in the world including Germany, UK, South East Asian nations, and so forth

Gandhi Special Tubes Ltd. some time ago known as GANDHI SPECIAL 07 TUBES LTD. was a venture set up by Gandhi Group. The task was for assembling little measurement welded and cold drawn consistent steel tubes. All the basic hardware was imported from Germany. The plant arranged at Gujarat, begun business creation in April 1988.

Various products of the company are
(i) Cold Drawn Bright Annealed Seamless Tubes
(ii) Precision Electric Resistance Welded Tubes
(iii) Cold-Formed Coupling Nuts
(iv) High Pressure Diesel Fuel Injection Tubes

Buy Back Offer Deal:

Buyback Type: Tender Offer
Buyback Offer Amount: ₹ 42.20 Cr
Date of Board Meeting approving the proposal: Jun 22 2021
Buyback Offer Size: 5.96%
Buyback Number of Shares: 7,66,616
Price Type: Tender Offer
FV: 5
Buyback Price: ₹ 550 Per Equity Share

Details of Buyback:

The Board of Directors of the Company at its meeting held today, June 22, 2021, has approved a proposal to buy back up to 7,66,616 Equity Shares of the Company, being 24.96% of the total paid-up equity share capital of the Company, for an aggregate amount not exceeding Rs. 42.2 Cr, at a price of Rs. 550 per Equity Share through " Tender Route".

Salient financial parameters:

Particulars (in Cr) Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21
Sales 91 98 114 123 81 114
Expenses 64 65 73 77 57 69
Operating Profit 27 33 41 46 24 45
OPM % 30% 34% 36% 37% 30% 39%
Other Income 3 10 8 8 6 6
Interest 0 0 0 0 0 0
Depreciation 5 4 4 4 4 3
Profit before tax 25 38 45 50 26 48
Tax % 26% 19% 26% 22% 18% 24%
Net Profit 19 31 34 39 21 36
EPS in Rs 12.62 20.96 24.29 27.96 16.54 27.98
Dividend Payout % 59% 43% 37% 32% 54% 32%

How to Participate in buyback?

1. Firstly to be eligible for the buyback the investor should have shares of Gandhi Special Tubes Limited Buyback 2021 in demat or physical form as on record date [Not Announced] 2. Once you have shares in demat, you can participate in the buyback process which is opening from [Not Announced] by selling your shares through your broker on NSE or BSE. 3. Then on [Not Announced], 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 363 Shares at CMP of Rs. 420 (2,00,000/550=363)
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback 1,52,460 1,52,460 1,52,460 1,52,460
No. of Shares buyback 120 182 272 363
BuyBack Profit 15,573 23,595 35,393 47,190
Profit 10.21% 15.48% 23.21% 30.95%

Recommendation:

Review and Recommendation of Gandhi Special Tubes Limited Buyback 2021 by IZ team is: 3/10 Fair: 1-5 Good:5-7 Excellent: 7-10 [Expected ER = 8%]

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