KPR Mill Limited Buyback Feb 2018

K.P.R. Mill Ltd is India’s largest vertically integrated Apparel manufacturing companies producing Yarn, Knitted Grey & Dyed, Fabric and Readymade Garments.The Company has it’s on Wind Mills to produce around 70% power for its personal consumption use. The Company also have Co-gen cum Sugar Plant at Karnataka.

Buy Back Offer Deal:

Buyback Type: Tender Offer
Buyback Record Date: Mar 07 2018
Buyback Opening Date: Mar 16 2018
Buyback Closing Date: Apr 02 2018
Buyback Offer Amount: ₹ 108 Cr
Date of Board Meeting approving the proposal: Feb 22 2018
Date of Public Announcement: Feb 22 2018
Buyback Offer Size: 1.81%
Buyback Number of Shares: 13.35 Lacs
FV: 5
Buyback Price: ₹ 810 Per Equity Share

Details of Buyback:

1.The Board of Directors of K. P. R. Mill Limited on February 22, 2018 passed a resolution to buyback Equity Shares of the Company not exceeding 13,35,000 (Thirteen Lakh Thirty Five Thousand) fully paid-up Equity Shares of face value 5 each from all the existing shareholders / beneficial owners of Equity Shares of the Company as on Record Date, on a proportionate basis, through the “Tender Offer” process, at a price of 810 (Rupees Eight Hundred Ten only) per Equity Share payable in cash, for an aggregate consideration not exceeding of 108,13,50,000/- (Rupees One Hundred Eight Crore Thirteen Lakhs and Fifty Thousand only). 2.The Buyback Offer Size represents 9.81% of the aggregate of the fully paid-up equity share capital and free reserves as per the audited standalone financial statements of the Company for the financial year ended March 31, 2017, (the last audited financial statements available as on the date of the Board Meeting approving the Buyback) and is within the statutory limits of 10% of the aggregate of the fully paid-up equity share capital and free reserves as per audited standalone financial statements of the Company under the Board of Directors approval route as per the provisions of the Companies Act, 2013. The maximum number of Equity Shares proposed to be bought back represents 1.81% of the total number of Equity Shares in the issued, subscribed and paid-up equity share capital of the Company

Salient financial parameters:

Parameters                           Standalone
       Pre-Buyback      Post- Buyback
(i) Net worth (in Crore)         1,118.06         1,009.92
(ii) Return on Net worth (%)           21.32            23.61
(iii)Earnings Per Share           31.71            32.86
(iv) Book Value per Share          151.3          139.18
(v) P/E          20.75            20.02
(vi) Total Debt/ Equity Ratio            0.44             0.49

Source of funds for the Buyback:

The funds for the Buyback will be met out of internally generated cash resources of the Company. The Company does not intend to raise additional debt for the explicit purposes of the Buyback. Accordingly, 20 borrowed funds will not be used for the Buyback. However, if required, the Company may borrow funds in the ordinary course of its business

Shareholding Pattern Pre and Post buyback:

           Particulars Pre Buyback Post Buyback
 Equity Shares %  Equity Shares %
(i) Promoters/Group 5,53,46,541 74.91% 544,85,731 75.09%
(ii) Foreign Investors 23,62,771 3.20% 1,80,75,053 24.91%
(iii) Financial Institutions/ Banks/ Mutual Funds 97,13,354 13.14%
(iv) Others 64,73,118 8.76%
 Total 7,38,95,784 100% 7,25,60,784 100%
 

How to Participate in buyback?

1. Firstly to be eligible for the buyback the investor should have shares of K.P.R Mills in demat or physical form as on record date 07 March 2018. 2. Once you have shares in demat, you can participate in the buyback process which is opening from 16 March 18 to 02 April 2018 by selling your shares through your broker on NSE or BSE. 3. Then on 09 April 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:

 
KPR Mill Ltd Buyback offer calculation for an investment of Rs 2,00,000 @720
% Share Accepted No of Shared Accepted Gain from Buyback Offer
         33%                92           Rs 8280
        50%               139           Rs 12510
        75%               208           Rs 18720
        100%               278            Rs 25020
(a) Categories in Buyback: (i) Reserved category- For Small Shareholders who holds Shares worth upto Rs. 2 Lacs before the Record date. (ii) General category - For all Shareholders other than Small Shareholders.  (b) Ratio of Buyback:
Category Entitlement Ratio of Buyback Per Equity Shares Entitlement Ratio of Buyback in %
Reserved Category 12 Equity Shares out of every 95 Equity Shares 12.63%
General Category 1 Equity Shares out of every 62 Equity Shares 1.61%
 

Recommendation:

Rating: 4/10 Fair: 1-5 Good: 5-7 Excellent: 7-10

Registrar Contact Details:

Karvy Computershare Private Limited Karvy Selenium Tow-B, Pl-31&32 Gachibowli, Nanakramguda, Hyderabad-500032

Company Contact Details:

KPR Mill Limited No 9 Gokul Buildings 1st Floor, AKS Nagar Thadagam Road, Tamil Nadu-641001