J. B. Chemicals & Pharmaceuticals Limited BuyBack 2018

J. B. Chemicals & Pharmaceuticals Limited BuyBack 2018

(i)
Established in 1976, J.B.Chemicals & Pharmaceuticals Ltd. (JBCPL) is one of India’s fastest growing pharmaceutical companies. An integrated, research-oriented, public listed organization with a focus on supplying affordable, quality products both in India and International markets, JBCPL is trusted by healthcare professionals globally. Today, JBCPL exports to over 30 countries across the world and earns more than half its revenue from its international business.

(ii) JBCPL is widely committed to manufacturing a range of innovative specialty products that include various pharmaceutical dosage forms like tablets, injectable (vials, ampoules, form fill seal), creams & ointments, lozenges, herbal liquids, and capsules.

(iii) JBCPL has its headquarters in India’s financial capital, Mumbai. With a domestic sales force of 1,000 people, 17 internationally approved state of the art manufacturing units, a Research and Development Centre, and subsidiaries abroad, the organization is continually enhancing value for its shareholders.

(iv) In India and International markets, JBCPL is also known as Unique Pharmaceutical Laboratories and is a division of JBCPL.

Buy Back Offer Deal:

Buyback Type: Tender Offer
Buyback Record Date: Sep 12 2018
Buyback Opening Date: Oct 10 2018
Buyback Closing Date: Oct 24 2018
Buyback Offer Amount: ₹ 130 Cr
Date of Board Meeting approving the proposal: Aug 31 2018
Date of Public Announcement: Aug 31 2018
Buyback Offer Size: 3.99%
Buyback Number of Shares: 33,33,333
FV: 2
Buyback Price: ₹ 390 Per Equity Share

Details of Buyback:

The Board of Directors of the Company has, at its meeting held today approved the Buy-back of up to 33,33,333 fully paid-up Equity Shares of the face value of Rs. 2/- each by the Company (representing 3.99% of the total paid-up Equity Share capital of the Company) at a price of Rs.390/- (Rupees three hundred ninety) per Equity Share payable in cash for a total consideration not exceeding Rs. 130/- crores (Rupees one hundred thirty crores only) through the 'Tender Offer" route.

Salient financial parameters:

Year Asset(cr) Revenue(cr) PAT(cr) EPS Debt(cr)
2016 1647.66 1199.4 179.2 21.09 193
2017 1674.04 1244.58 172.96 20.39 48
2018 1764.89 1289.99 128 15.24 29

Shareholding Pattern Pre and Post buyback:

                                          Pre Buy-back Shareholding Pattern
Category of Shareholder  No Equity Shares %
Promoters and Promoter Group and Persons acting in concert 46,656,278 55.83
Public Shareholding 36,913,697 44.17
 Total 83,569,975 100.00

How to Participate in buyback?

1. Firstly, to be eligible for the buyback the investor should have shares of J.B. Chemicals & Pharmaceuticals Limited BuyBack offer 2018 in demat or physical form as on the record date [12.09.2018]. 2. Once you have shares in demat, you can participate in the buyback process which is opening from [10.10.2018 to 24.10.2018] by selling your shares through your broker on NSE or BSE. 3. Then on [01.11.2018], 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 500 Shares at CMP of Rs.340 [1,95,000/390=500)
Acceptance Ratio 33% 50% 75% 100%
(i) Amount Invested in Buyback 1,95,000 1,95,000 1,95,000 1,95,000
(ii) No. of Shares buyback 165 250 375 500
(iii) BuyBack Profit 8250 12500 18750 25000
(iv) Profit(%) 4.23% 6.41% 9.61% 12.82%
Final Acceptance Ratio Detail for J B Chemicals Buyback 2018

Recommendation:

Review and Recommendation of J. B. Chemicals & Pharmaceuticals Limited BuyBack by InvestorZone team is: 4/10 [Acceptance Ratio: 20-25% ] Fair: 1-5 Good:5-7 Excellent: 7-10  

Company Contact Details:

J. B. Chemicals & Pharmaceuticals Limited Cnergy IT Park, Unit A2, 3rd floor & Unit A, 8th floor, Appa Saheb Marathe Marg, Prabhadevi, Mumbai 400 025. Phone No. 91-22-2439 5200 / 2439 5500 Fax No. 91-22-2431 5331 / 2431 5334 Email: info@jbcpl.com Website:www.jbcpl.com

    Final Analysis of J B Chemicals & Pharma Buyback 2018 ( Return Analysis)

    1. Buyback Announcement date: 31.08.2018—– Share Price was 338

    2. 500 Shares bought at Rs. 338 means an investment of 1,69,000.

    3. Retail Acceptance Ratio was 37.5%. i.e. out of 500 shares, 187 shares have been buyback by the company. Profit on Accepted Shares–9724.

    4. The final Accepted Shares were taken back on 1.11.2018. The CMP on 01.11.2018 was 314. If someone sells his remaining shares 313 at a loss of Rs.24 per shares the loss would be (313*24=7512).

    5. Overall we can say a profit of 2212 on an investment of 1,69,000 in 2 months which is equivalent to 7.85% Annualized return.

    P K, That mesg. may be from NSDL DP, check your mail you must have recd. mail reg acceptance of shares. I offered 15 and they accepted 5.

      Ok, I am confirming that out of tendered 20, amount credited just now in my account is only for 7 shares. So, it is 35% acceptance for me.

      However, I do not see any share outstanding in my DP today since morning itself and that caused all confusion. So, I hope to get back rest of the shared for trading by tomorrow.

    Are you guys sure about acceptance ratio? I had 20 shares and got entitlement of only 2 (i.e 10%). I offered all the (20) shares and today got message that 20 debited.. It means 100% acceptance ratio. Please recheck.

    Final day bid details are as below:
    Category No. of shares bid for

    Qualified Institutional Buyers (QIBs) 58,70,741
    Non Institutional Investors 3,00,900
    Individual Investors 51,96,939

    What would be approx. entitlement ratio from the above figures for retail investors?

      Not sure where you got this figure. However, total shares on offer is 33,33,333. 15% of this is 5,00,000. If your numbers are correct then; since Individual investors offer is 10 times what is available in plate for JBC, you can think of 12-15% acceptance ratio in this category.

    In JB Chemical, entitlement ratio is 10%. This means, acceptance could be around 15-20%.

    Record date is declared, it is Sep 12, so 4 trading days left.
    You can buy till 10th Sep to be eligible!!

      Unlike TCS and HCLTech, price of JBChem is not going up. It shows lack of interest. So, anyone who is trapped around 330+ rate seems would be in loss as share would go back to its earlier position of around 250 after buyback.

    The company has excellent DII and FII Holding:

    MFs holding
    (i) DSP BLACKROCK SMALL CAP FUND= 3447656( 4.13%)
    (ii) FRANKLIN INDIA SMALLER COMPANIES FUND= 2981497(3.57%)
    (iii) ICICI PRUDENTIAL DYNAMIC FUND= 1437251(1.72%)

    Alternate Investment Funds
    (i) DSP BLACKROCK AIF PHARMA FUND= 1345785(1.61%)

    FII/FPI
    (i) CREDIT SUISSE (SINGAPORE) LIMITED = 882912(1.06%)

    Acceptance Ratio Calculation
    (i) No. of Equity Shares between 0-500 were 3,816,952.
    (ii) No. of Equity Shares Reserved for Retail Shareholders are= 4,99,999
    (iii) Suppose till record date no. of people holding shares between 0-500 increases to 40 Lacs and assuming 50% participation in the buyback.
    (iv) Then Acceptance Ratio would be = 25%.

    Last Year Buyback Acceptance Ratio
    (i) No. of Equity Shares Reserved for Retail Shareholders were = 1,87,500
    (ii) No. of Valid Shares Tendered = 8,98,015
    (iii) Acceptance Ratio was= 21%

      Please note that last year acceptance ratio is not a criteria. It is the ratio of shares tendered to the share accepted.
      Important is eligibility, company would send offer for the no. of eligible shares to be bought, may be 25% in this case. Now after record date, you can sell may be 50% at market rate, which would provide you some profit.
      For remaining 50%, if you tender all to company the acceptance by company would be 25% (sure) + ratio of under subscription, equally divided.
      It may happen that overall acceptance ratio is 80%, but your shares accepted other than 25% is too low…
      In Navneet, I bought 1300, sold 900 tomorrow and would tender 400 in buy back. May be all would be accepted.

        Sumit ji, Acceptance ratio calculation is very tough. There are many factors present like:

        1. How many people actually participate in buyback?

        2. Is price nearing to Offered price when buyback gets opened? Recent example of TCS, the price of share crossed offer price today. So all who bought for buyback would have sold today. So acceptance ratio which was around 50% one month back is 100% now.

        3. If share price falls the more people will participate in buyback instead of selling their shares in the market, so accordingly the acceptance ratio will go down.

        Conclusion-So in short Acceptance ratio is a game of assumption which is keep on changing till buyback is over.

    (i) JBCPL, one of India’s leading pharmaceutical companies, manufactures & markets a diverse range of pharmaceutical formulations, herbal remedies, and APIs.

    (ii) JBCPL exports to many countries worldwide with a presence in US, Europe, Australia, South Africa, other developing countries, Russia and CIS. The Company continues to invest in growing its share in the regulated markets such as USA, Europe, and Australia. JBCPL has a strong R&D and regulatory set-up for development of new drug delivery system and formulations, the filing of ANDAs and DMFs. Its state-of-the-art manufacturing facilities are approved by health authorities of key regulated markets.

    Shares of *JB Chemicals & Pharmaceuticals* will remain in focus, as its board meets *on Friday* to consider a proposal of *buyback*. Shareholders would be keen to know the size and price of the buyback issue, besides its promoters’ interest.

    The mode of buyback – whether through open market purchase or by tender process, will also be watched.

    Last year, JB Chemicals had concluded its ₹50-crore buyback, buying back 12.01 crore shares at ₹400/share through the tender route.