MPS Buyback 2021

MPS, a leading global provider of platforms, and content, and learning solutions for the digital world, was established as an Indian subsidiary of Macmillan (Holdings) Limited in 1970. The long service history as a captive business allowed MPS to build unique capabilities and talents through strategic partner programs. MPS is now a global partner to the world’s leading enterprises, learning companies, publishers, libraries, and content aggregators. After change of majority stake in 2011-12 and with an entrepreneurial mindset MPS developed significant momentum as a result of consistent reinvestment in the business and seven successful acquisitions in the same number of years. MPS is listed on the major stock exchanges in India with a market capitalization upward of INR 700 crores. More than 2,700 professionals power MPS across seven delivery centers in India, four offices in Europe, and six client-servicing offices in the US.

Buy Back Offer Deal:

Buyback Type: Tender Offer
Buyback Offer Amount: ₹ 85 Crores
Date of Board Meeting approving the proposal: Oct 27 2021
Date of Public Announcement: Oct 27 2021
Buyback Offer Size: 5.23%
Buyback Number of Shares: 9,44,444
Price Type: Tender offer
FV: 10
Buyback Price: ₹ 900 Per Equity Share

Details of Buyback:

The buyback of fully paid-up equity shares having a face value of INR 10 (Indian Rupee Ten only) each (“Equity Shares”), not exceeding 9,44,444 (Nine Lakhs Forty Four Thousand Four Hundred and Forty Four only) Equity Shares (representing upto 5.23% of the total paid up Equity Share capital of the Company as on 31st March, 2021) at a price of INR 900 (INR Nine Hundred only) per Equity Share payable in cash for an aggregate amount not exceeding INR 85,00,00,000 (INR Eighty Five Crores only), excluding tax payable under Income Tax Act, 1961 and any expenses incurred or to be incurred for the buyback viz. brokerage costs, fees, turnover charges, taxes such as tax on buyback, securities transaction tax and goods and services tax (if any), stamp duty, printing and dispatch expenses, if any, filing fees to SEBI, advisor/legal fees, public announcement publication expenses and other incidental and related expenses and charges (“Transaction Costs”) (such maximum amount hereinafter referred to as the “Buyback Offer Size”) which represents 21.50% and 20.35% of the fully paid-up Equity Share capital and free reserves as at September 30, 2021, (“being the latest standalone and consolidated un-audited & limited reviewed condensed interim financial statements as on September 30, 2021, available after the audited financial statements for the period ended March 31, 2021.

Salient financial parameters:

Particulars (in Cr) Mar 2017 Mar 2018 Mar 2019 Mar 2020 Mar 2021
Sales + 289 267 363 332 423
Expenses + 195 180 269 253 316
Operating Profit 93 87 94 79 107
OPM % 32% 33% 26% 24% 25%
Other Income 15 23 25 20 10
Interest 0 0 0 2 2
Depreciation 6 8 11 15 21
Profit before tax 103 102 107 81 93
Tax % 31% 31% 29% 26% 37%
Net Profit 70 70 76 60 59
EPS in Rs 37.83 37.71 40.84 32.15 32.44

How to Participate in buyback?

1. Firstly to be eligible for the buyback the investor should have shares of MPS Ltd Buyback Offer 2021 in demat or physical form as on record date [Not Announced] 2. Once you have shares in demat, you can participate in the buyback process which is opening from [To be announced] by selling your shares through your broker on NSE or BSE. [Not Announced] 3. Then on [Not Announced], the payment will be given to you for accepted shares and unaccepted shares will be returned to your demat account.[Not Announced]

Profit from the buyback on the bases of acceptance Ratio:

Buy 222 shares at CMP of Rs.703 [2,00,000/ 900= 222]
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback 156066 156066 156066 156066
No. of Shares buyback 73 111 166.5 222
BuyBack Profit 12,191 18,537 27,806 37,074
Profit% 8% 12% 18% 24%

Recommendation:

Review and Recommendation of MPS Ltd Buyback 2021 by IZ team is: 5/10 A very small buyback of just 85 Crores. Arbitrage of 23% available which is very good.

26 Comments

      Sir,
      I completely agree with your opinion. Once again appreciate your response and thank you very much for your consideration regarding sharing your views.

        Dear Sumit Sir and Sivaramakrishna Sir,
        According to my calculations in Nucleus Software, there will never be 100% AR and SRK Sir there will neither 60% to 70% AR in the retail category.

        SRK Sir kindly refer to the postal ballot notice of Nucleus software in which the promoter expressed their intention of not tendering their share is buyback which make it attractive under the Non-retail Category. Even Aniketeaf Sir on the Chittorgarh Platform mentioned that there is a good chance of acceptance under the Non-retail category as compared to the retail category.

        My belief is that in Nucleus Software:-
        Under Retail Category, ER will be around 13% to 15% and AR will be around 30%.
        Under Non-Retail Category ER will be around 7% and AR will be sure shot more than 30% as promoters will not tender their shares as per their intention described under the Postal ballot issued by them. So we can expect AR between 30% to 40% under Non-retail Category.

          SRK Sir, I have learned a lot from you from the Chittorgarh Platform and I know you are always Investor friendly and want to help the retail investor to grow their wealth.

          I request you to kindly contact me if you are not able to understand anything from the above message as the record date has already been announced and we can buy till 24/11/2021.

          I don’t know when you will be reading my above message so due to time constraints if you wish to communicate in regard to this you can call or WhatsApp me on 8847291947.

          Sir,
          Somehow I am still under confusion and unable to digest that the AR would be around 30% only in retail category and 30% to 40% in other category. I humbly submit that I don’t mind even if I am proved wrong. Thank you.

            Dear Sir,
            BOD of Nucleus Software announced BB of 22,67,400 Shares. Out of which 15% is reserved for SSHs i.e. 3,40,110 Shares and the other 19,27,290 for the Non-retail Category.

            In their previous BB in August 2017 total number of SHs having Shares of Face Value of less than 2Lakhs on the record date as per the BSE Shareholding pattern of June 2017 was 51,41,092, and its LOF (Pg No:-31) shows that Small SHs have 21,23,302 shares on the record date then balance 30,17,790 is with shareholders having its market value of greater then 2Lakhs and No. of shares reserved shares for SSHs was 5,01,450, and post BB they left with 16,21,852 shares.

            After looking into No. of Shareholders from 14,561 (Source:-LOF,2017) to approx 40,000 (Source:-BSE SH pattern Sept 2021) I am assuming that their holding has increased to around 26,00,000 from 16,21,852 in these 4 years.

            So after anticipating the above figures ER will be around 13% (3,40,110/26,00,000*100) and after analyzing the number of people who tendered their holding in 2017 I am anticipating AR to be 30%.

            For the Non-Retail Category:-
            Total Free Float is 94,12,858 excluding promoters shares as they will not tender their shares as per their intention expressed in postal ballot out of which SSHs having 26,00,000 (assumed); 1,53,178 with Directors relatives; 43,526 with IEPF.

            After deducting all there from Total FF we are left with 66,16,154 Shares with MF, FII, HNI Individuals.
            Now assume if they tender all number of shares they have the AR will be a minimum of 29% (19,27,290/66,16,154*100). I think so the Final AR under Non-retail will be between 29% to 40% .

              As there is the certainty of a minimum AR of 29% in the Non-retail category as compared to the retail category I am planning to buy in 1 Account instead of my 5 family members account.

              SRK Sir, if you still believe AR to be above 40% in the retail category then I will plan to buy shares of value less than 2Lakh in 1 account and balance amount in the Non-retail category in another account.

              Let’s experience this BB under both categories.

                Ayush ji,
                I am also planning to keep the shares worth below Rs. 2 lakhs in one account and worth more than Rs. 2 lakhs in another account to play safe and to avoid grief if either way is proved wrong. Thank you.

    Dear Sirs,
    The original message under moderation for long, probably due to bse link. Posting again:

    Thanks for making me relook at MPS, despite my pre-conception.
    Got to see postal ballot notice of MPS ltd and intention of promoter for buyback at bse website:
    “In this regard, ADI BPO Services Limited, the promoter of the Company, has expressed its intention to participate in the Buyback vide its letter dated 27th October, 2021 and may tender upto maximum of 944,444 (Nine Lakhs Forty Four Thousand Four Hundred and Forty Four only) Equity Shares orsuch lower number of the Equity Shares in accordance with the provisions of the SEBI Buyback Regulations.”
    I understand 1,22,71,608 are total nos of Promoter share it means only 7% of ~ 68% = 4.75 %could be tendered.
    It makes it much more attractive.
    Request all to check and confirm

      Dear Sumit Sir,
      In buyback of MPS Company announced BB of 9,44,444 Shares out of which 15% i.e. 1,41,667 is reserved of small shareholders and balance 8,02,777 is for the Non-retail category or we can say General Category.

      Promoters have 1,22,71,608 shares as you mentioned and they can be entitled to tender their 4% shares that come around 4,90,865 Shares. So after deducting their Entitled shares out from 8,02,777 we are left with only 3,11,912 Shares and there are around 50,00,000 other shareholders under Non-retail Category. Based on previous experience of tendering shares by them with full force final AR can be expected to be less than 12% in Non-retail Category.

      It is better to participate in the Retail Category in this where AR can be 30%.

    Dear Team,
    Thanks for making me relook at MPS, despite my pre-conception.
    Got to see postal ballot notice of MPS ltd and intention of promoter for buyback at
    https://www.bseindia.com/xml-data/corpfiling/AttachHis/6e3f417c-f05e-4f6e-aeb9-7ced04d2b7bc.pdf
    “In this regard, ADI BPO Services Limited, the promoter of the Company, has expressed its intention to participate in the Buyback vide its letter dated 27th October, 2021 and may tender upto maximum of 944,444 (Nine Lakhs Forty Four Thousand Four Hundred and Forty Four only) Equity Shares orsuch lower number of the Equity Shares in accordance with the provisions of the SEBI Buyback Regulations.”
    I understand 1,22,71,608 are total nos of Promoter share it means only 7% of ~ 68% = 4.75 %could be tendered.
    It makes it much more attractive.
    Request all to check and confirm

      Dear Sumit Sir,
      In buyback of MPS Company announced BB of 9,44,444 Shares out of which 15% i.e. 1,41,667 is reserved of small shareholders and balance 8,02,777 is for the Non-retail category or we can say General Category.

      Promoters have 1,22,71,608 shares as you mentioned and they can be entitled to tender their 4% shares that come around 4,90,865 Shares. So after deducting their Entitled shares out from 8,02,777 we are left with only 3,11,912 Shares and there are around 50,00,000 other shareholders under Non-retail Category. Based on previous experience of tendering shares by them with full force final AR can be expected to be less than 12% in Non-retail Category.

      It is better to participate in the Retail Category in this where AR can be 30%.

    Dear Ayush Jindal ji and Dear SRK ji,
    2020 was a very good year with many shares crossing their buyback prices during buyback period or immediately after. Not remembering exactly but NMDC, NTPC, TCS and Wipro were very good. Indian toners was a dark horse with 100% acceptance.
    For MPs, the rate was high before buyback and only 25% Acceptance was done and then price had fallen very quickly, leading to almost no profit in the share,
    I am believing Nucleus may be the dark horse with 100% AR. But am not sure if retail or general category would be better, Kindly check and suggest.

      Thank you very much for sparing your precious time and sharing your experience. I am also hopefully looking forward for a good AR of around 60% to 70% in retail category. I don’t have any idea about non retail categories. Thank you.

        Dear Sumit Sir and Sivaramakrishna Sir,
        According to my calculations in Nucleus Software, there will never be 100% AR and SRK Sir there will neither 60% to 70% AR in the retail category.

        SRK Sir kindly refer the postal ballot notice of Nucleus software in which the promoter expressed there intention of not tendering their share is buyback which make it attractive under the Non-retail Category. Even Aniketeaf Sir on the Chittorgarh Platform mentioned that there is a good chance of acceptance under the Non-retail category as compared to the retail category.

        My belief is that in Nucleus Software:-
        Under Retail Category ER will be around 13% to 15% and AR will be around 30%.
        Under Non-Retail Category ER will be around 7% and AR will be sure shot more than 30% as promoters will not tender their shares as per their intention described under the Postal ballot issued by them. So we can expect AR between 30% to 40% under Non-retail Category.

          Sir,
          If you don’t mind, please update on 24th morning if possible so that it can be reviewed, analysed and appropriate decision taken. Thank you.

            Dear Sir,
            BOD of Nucleus Software announced BB of 22,67,400 Shares. Out of which 15% is reserved for SSHs i.e. 3,40,110 Shares and the other 19,27,290 for the Non-retail Category.

            In their previous BB in August 2017 total number of SHs having Shares of Face Value of less than 2Lakhs on the record date as per the BSE Shareholding pattern of June 2017 was 51,41,092, and its LOF (Pg No:-31) shows that Small SHs have 21,23,302 shares on the record date then balance 30,17,790 is with shareholders having its market value of greater then 2Lakhs and No. of shares reserved shares for SSHs was 5,01,450, and post BB they left with 16,21,852 shares.

            After looking into No. of Shareholders from 14,561 (Source:-LOF,2017) to approx 40,000 (Source:-BSE SH pattern Sept 2021) I am assuming that their holding has increased to around 26,00,000 from 16,21,852 in these 4 years.

            So after anticipating the above figures ER will be around 13% (3,40,110/26,00,000*100) and after analyzing the number of people who tendered their holding in 2017 I am anticipating AR to be 30%.

            For the Non-Retail Category:-
            Total Free Float is 94,12,858 excluding promoters shares as they will not tender their shares as per their intention expressed in postal ballot out of which SSHs having 26,00,000 (assumed); 1,53,178 with Directors relatives; 43,526 with IEPF.

            After deducting all there from Total FF we are left with 66,16,154 Shares with MF, FII, HNI Individuals.
            Now assume if they tender all number of shares they have the AR will be a minimum of 29% (19,27,290/66,16,154*100). I think so the Final AR under Non-retail will be between 29% to 40% .

    Jain ji,
    If you don’t have any objection, please share your buyback experience of the 2020 so that we will be cautious. Help us to avoid the possible loss/ difficulty in the present Buyback. Thank you.

      Jain ji,
      If you don’t have any objection, please share your buyback experience of the 2020 so that we will be cautious. Help us to avoid the possible loss/ difficulty in the present Buyback. Thank you.

    One can purchase shares at the CMP for tendering for buyback. You will definitely get a reasonably minimum profit. I hope that the ER will be around 7% and AR around 15%. Chances of much downfall in the price of unaccepted shares after the buyback are very less. Thank you.

      Sir, according to my calculations after analyzing the shareholding pattern the AR will be above 30%.

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