KPR Mill Limited Buyback Offer 2019

K.P.R. Mill Ltd is India’s largest vertically integrated Apparel manufacturing company 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 has a Co-gen cum Sugar Plant at Karnataka.

Buy Back Offer Deal:

Buyback Type: Tender Offer
Buyback Record Date: Jun 19 2019
Buyback Opening Date: Oct 29 2019
Buyback Closing Date: Nov 11 2019
Buyback Offer Amount: ₹ 263.31 Cr
Date of Board Meeting approving the proposal: Apr 29 2019
Date of Public Announcement: Apr 29 2019
Buyback Offer Size: 5.17%
Buyback Number of Shares: 37,50,784
FV: 5
Buyback Price: ₹ 702 Per Equity Share

Details of Buyback:

The Board of Directors in its meeting held on 29.04.2019 proposed a buyback of 37,50,784 Equity shares of 5/-each (representing 5.17% of the total number of paid-up equity shares of the Company) from the shareholders of the Company on proportionate basis by way of tender offer route at a p.ice of 702/- per share for an aggregate amount of 26,331 Lakhs subject to the approval of the Shareholders by way of Postal Ballot in accordance with the provisions of the Companies Ad, 2013 and the SEBI (Buy Back of Securities) Regulations, 2018. [ Tender Offer Buyback ]

Salient financial parameters:

(in Cr.) 2018 2017 2016
Income Statement
Revenue 2,511.52 2,219.14 1,961.27
Other Income 15.07 27.12 33.61
Total Income 2,526.59 2,246.26 1,994.88
Expenditure -2,112.06 -1,818.52 -1,605.26
Net Profit 224.97 238.42 155.54
Equity 36.95 36.95 37.68
EPS 30.44 31.71 41.08
OPM % 16.51 19.28 19.87
NPM % 8.96 10.74 7.93
Source: BSE

How to Participate in buyback?

1. Firstly to be eligible for the buyback the investor should have shares of KPR Mill Limited Buyback Offer 2019 in demat or physical form as on record date. [ 19.06.2019] 2. Once you have shares in demat, you can participate in the buyback process which is opening from [29.10.2019 to 11.11.2019] by selling your shares through your broker on NSE or BSE. 3. Then on [ 19.11.2019 ], 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 284 Shares at CMP of Rs. 644 [2,00,000/702 =284)
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback 1,82,896 1,86,276 1,86,276 1,82,896
No. of Shares buyback 93 142 213 284
BuyBack Profit 5394 8236 12354 16472
Profit 2.9% 4.44% 6.66% 9.00%

Recommendation:

[ The company initially canceled buyback. However, now they are again conducting it. ]

    The entitlement for the Reserved category is 95 out of 142 which means is approx 67%. Cheers for investors who took risk and apply.

    KPR Mill to proceed with share buyback plan after SEBI approval

    Finance Secy: No Decision On Raising Minimum Public Shareholding, Only Consultations Have Started

    All Cos To Have 25% Minimum Public Shareholding By August 2020

    Can Discuss Grandfathering Tax On Buybacks

    Jn gupta ex sebi on cnbc says no going back on buyback after announcement

    Kpr need to take exemption from sebi.

    Co can’t cancel buyback once announced n file docs

    Surprising.. After fixing the record date the company has cancelled the buyback ..giving the reason of tax proposed by finance bill 2019 not considered

      Nice!!! More budget killer will come out.

    Please suggest at what price we should enter for buyback and shall we wait for record date

    Should we buy at 610 or it is too high
    What are ar expectations and is company fundamentally good

    Is it good idea to buy at current rate of 585 to participate in buy back- kindly advise

      Please refrain from buying till election results are announced. In case BJP Govt does not come in the majority, a big fall is expected in the market. So don’t risk at this moment. The Nifty may go to 9500-10000 levels.

    If the price falls then this is a good company to pick. The company is paying 80% of earnings this fiscal as payout to shareholders. It has also paid 30% of earnings past 3-4 years. This may not be good from buyback play as acceptance could be below 20% in this counter. But i like the prospects specially the Ethanol foray should provide good boost to earnings.

    buyback detail 2018

    1. Buyback Size= 108.31.

    2. Buyback Price = 810.

    3. Share Price = 714 ( on 24-02-2018 when buyback was announced).

    4. Record Date = 07.03.2018( Share price on 05.03.2018 was 727 but then it fell to 703 on Ex- Record date i.e 06.03.2018 as most of the investors sell before the record date).

    5. Final AR for Retail Category = 5.20%

    6. Final unaccepted shares were given back on 09.04.2019. The share price on 09.04.2019 was 638.

    So we can conclude that if somebody has bought 100 Shares to take participate in buyback thereby invested 71400 would have made a loss of ~6500.

    Having said all, we need to remember that the share price fell drastically due to very poor market condition post-LTCG and this time we have Election in front of us in May. The market may show huge volatility in case of hung govt.

    So I would request to keep away from small buybacks until the election is over.

    (i) As on 31.03.2019, the number of shares up to 2 lacs are 37,89,010.

    (ii) The number of Shares reserved for Retail Shareholders is 5,62,617.

    (iii) Entitlement based on this is = 15%

    The Board has recommended a Final Dividend of 15% ( 0.75- per share of the face value of { 5/- each).

    EPS for FY19 stands at 40. So currently KPR Mills is trading at P/E of 16.1.

    (i) Garment Production up by 20.20% YoY to 94.19 Million Garments compared to 78.36 Million Garments.
    (ii) FY19 Revenue up by 12.54% YoY to Rs.3,420.91 Crores from Rs.3,039.70 Crores

    (iii) FY19 EBITDA up by 10.04% YoY to Rs.648.65 Crores from Rs.589.44 Crores

    (iv) FY19 PBT up by 17.72% YoY to Rs.468.58 Crores from Rs.398.03 Crores

    (v) FY19 PAT up by 15.32%YoY to Rs. 334.87 Crores From Rs.290.38 Crores