Godawari Power & Ispat Limited Buyback 2024

1. Company Background:

a) Godawari Power & Ispat Ltd. (GPIL), formerly known as Ispat Godawari Ltd (IGL), was incorporated in 1999.

b) It was established to set up an integrated steel plant with captive power generation.

c) GPIL has a dominant presence in the long product segment of the steel industry, primarily focusing on mild steel wire.

2. Integrated Manufacturing:

a) GPIL is an end-to-end manufacturer of mild steel wires.

b) The company’s manufacturing process includes the production of sponge iron, billets, ferro alloys, captive power, wire rods (through a subsidiary), steel wires, oxygen gas, fly ash bricks, and pallets.

c) GPIL has been awarded rights for iron ore and coal mining for captive consumption, enabling it to manage the entire value chain from raw material to final product

3. Product Portfolio:

a) GPIL’s product offerings include mild steel wires, sponge iron, billets, ferro alloys, wire rods, oxygen gas, fly ash bricks, and pallets.

b) The company has a comprehensive product range catering to various segments of the steel industry.

4. Growth and Expansion:

a) The company has shown remarkable growth backed by higher production volumes and better price realisations.

b) 2007-08 marked a significant year of performance improvement for GPIL.

Buy Back Offer Deal:

Buyback Type: Tender Offer
Buyback Record Date: Jun 28 2024
Buyback Opening Date: Jul 04 2024
Buyback Closing Date: Jul 10 2024
Buyback Offer Amount: ₹ 301 Cr.
Date of Board Meeting approving the proposal: Jun 15 2024
Date of Public Announcement: Jun 15 2024
Buyback Offer Size: 1.64%
Buyback Number of Shares: 21,50,000
FV: 5
Buyback Price: ₹ 1400 Per Equity Share

Details of Buyback:

The proposal to buyback not exceeding 21,50,000 (Twenty One Lakh Fifty Thousand) equity shares of the Company (representing 1.64% of the total number of equity shares in the paid-up share capital of the Company) at a price of Rs. 1400 (Rupees One Thousand Four Hundred Only) per equity share payable in cash for an aggregate consideration not exceeding Rs. 301 Crores (Rupees Three Hundred and One Crore only)

Salient financial parameters:

Particulars (In cr) Mar 2020 Mar 2021 Mar 2022 Mar 2023 Mar 2024
Sales + 3,270 3,949 5,397 5,745 5,455
Expenses + 2,646 2,812 3,529 4,612 4,127
Operating Profit 624 1,137 1,868 1,134 1,328
OPM % 19% 29% 35% 20% 24%
Other Income + -3 48 175 93 129
Interest 212 115 20 20 60
Depreciation 137 109 105 124 141
Profit before tax 273 962 1,918 1,083 1,256
Tax % 35% 32% 24% 27% 26%
Net Profit + 177 655 1,467 793 936
EPS in Rs 11.83 45.28 104.06 56.29 68.89
Dividend Payout % 0% 10% 12% 7% 0%

How to Participate in buyback?

1. Firstly, to be eligible for the buyback the investor should have shares of  Godawari Power & Ispat Limited in Demat or physical form as on the record date [28-06-2024].
2. Once you have shares in Demat, you can participate in the buyback process which is opening from [04-07-2024] by selling your shares through your broker on NSE or BSE.
3. Then on [29-07-2024], 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 143 Shares at CPM of Rs. 1078 (2,00,000/1400)
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback 154154 154154 154154 154154
No. of Shares Buyback 47 71 107 143
Buyback Profit 15134 22862 34454 46046
Profit% 9.82% 14.83% 22.35% 29.87%

27 Comments

    Buyback Subscription going beyond 400% . i think AR will be same as ER here, lets see.

        No, it is not mandatory to tender all the shares, but, the more shares you tender, the more company is likely to buyback from you..

    KDDL BOARD MEETING on 9th July for buyback consideration.
    Cmp 3100

    I think it is good time to buy stock for Buyback as the margin is around 30% which you do not see often in buyback.

    Last time buyback size of 250 Cr. and price was 500/. AR was 32.5℅. This time 301Cr. at 1400/. So in my opinion AR would be around 5-6℅.I am not going to participate

        This is like declarating that you take it or leave it, I’m in a hurry type of a buyback .

      I have got the buyback email. 5 shares out of 50 ! I should have sold this before when I had the chance!

    Godawari Power and Ispat Ltd

    Board Meeting – 15-06-2024
    Route – Tender offer
    Record date – 28-06-2024
    Buyback Size – INR 301 Cr
    Buyback Price – INR 1400
    CMP- INR 1079
    Proposed buyback Share – 21,50,000
    Premium form CMP : 29.75%
    Mkt Cap : 14,666 Cr
    Promoter Participation : Yes
    Buyback representing 7% of total paid up capital and free reserve

    The stock price have increased more than 10% after announcement and also this year there has been no revenue growth but stock price have gone up exponentially. Looks a risk to me.

    last year buyback price was 500 now it is ranging in 1000 can it come out with price of 1200. any idea anybody.

      Too early to speculate. We will have to check this on weekend if they approve the buyback but best to accumulate shares for now.

        i am holding in 3 account 1000, 300 and 200 i am long term investor please guide if any suggestions please to get best benefit.

          As far as I have experienced,in buyback the existing investor ( retail investor) surely gets benefitted. The strategy is buy back the accepted shares at lesser rate compared to buyback price . Thus cost of acquisition comes down drastically . 9873713178

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