KPR Mill Limited Buyback Offer 2022

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: Feb 19 2022
Buyback Opening Date: Mar 25 2022
Buyback Closing Date: Apr 07 2022
Buyback Offer Amount: ₹ 179 Crores
Date of Board Meeting approving the proposal: Jan 27 2022
Date of Public Announcement: Jan 27 2022
Buyback Offer Size: 0.65%
Buyback Number of Shares: 2236000
Price Type: Tender offer
FV: 1
Buyback Price: ₹ 805 Per Equity Share

Details of Buyback:

The Board of Directors in its meeting held on 07.02.2022 proposed a buyback of 22,36,000 Equity shares of 1/-each (representing 0.65% 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 price of 805 - per share for an aggregate amount of 179 Crores 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. [ Tender Offer Buyback ]

Salient financial parameters:

 
Particulars (in crores) 2021 2020 2019
Sales 3,530 3,353 3,384
Expense 2,701 2,731 2,772
Operating Profit 830 622 612
OPM% 24% 19% 18%
Other Income 39 36 37
Interest 33 50 49
Depreciation 147 137 131
Profit before tax 689 472 469
Tax % 25% 20% 29%
Net Profit 515 377 335
EPS 15 10.95 9.23
 

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. [ 19.02.2022] 2. Once you have shares in demat, you can participate in the buyback process which is opening from [To be Updated] by selling your shares through your broker on NSE or BSE. 3. Then on [ 19.04.2022 ], 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  248 Shares at CMP of Rs. 650 [2,00,000/805 =248)
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback 1,61,200 1,61,200 1,61,200 1,61,200
No. of Shares buyback 81 124 186 248
BuyBack Profit 12,555 19,096 28,644 38,192
Profit 7.77% 11.84% 17.76% 23.26%
 

Recommendation:

(i) As on 31.12.2021, the number of shares up to 2 lacs are 2,03,01,324. (ii) The number of Shares reserved for Retail Shareholders are 3,35,400 (iii) Entitlement based on this is = 2% However, there is a good arbitrage available between Current Market Price and Buyback Price. Plus, results of Dec-21 quarter are also very good.

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