R Systems Buyback 2021

They were incorporated in 1993 as a software consulting firm in the United States. With a focus on delivering quality to all customers, they started the India operations in 1997, by setting up our offshore software development center in Noida, India.

They received strategic investments from Intel Capital and GE Capital in 2001 and 2002. With a backdrop of successful response from ISVs, they underwent a massive transformation in 2006. From offshore software Development Company to global outsourced product Development Company, they revisited their business focus. The remarkable acquisitions at that time included Pune-based Indus Software and Singapore-based ECnet.

During this phase, they strengthened their serviceability by aligning mature quality assessments like CMMI Level 5, ISO: 9001: 2008, PCMM Level 5, and Six Sigma certifications. They also added US-based Web Converse & Europe-based Sento in their list of acquisitions and became a listed member on National Stock Exchange (NSE) and Bombay stock Exchange (BSE)

They began offering services in four major verticals including; Banking & Finance, Telecom & Digital Media, Healthcare, and Manufacturing & Logistics. To further strengthen the Telecom Vertical, we acquired UK-based Computers.

Buy Back Offer Deal:

Buyback Type: Tender Offer
Buyback Record Date: Aug 27 2021
Buyback Offer Amount: ₹ 30 Cr
Date of Board Meeting approving the proposal: Aug 06 2021
Date of Public Announcement: Aug 06 2021
Buyback Offer Size: 10.83%
Buyback Number of Shares: 1,333,000
Price Type: Tender Offer
FV: 1
Buyback Price: ₹ 225 Per Equity Share

Details of Buyback:

RS System has approved the proposal for Buyback of Equity Shares of the Company of upto 1,333,000 (Thirteen Lakhs Thirty Three Thousand) fully paid-up Equity Shares of Re. 1/- each of the Company (representing 1.11% of the total number of equity shares in the paid-up share capital of the Company) at a price of Rs. 225/- (Rupees Two Hundred Twenty Five only) per equity share (hereinafter referred as “Buyback Price”) payable in cash for an aggregate consideration not exceeding Rs. 299,925,000 (Rupees Twenty Nine Crores Ninety Nine Lakhs Twenty Five Thousand only) (hereinafter referred as “Maximum Buyback Size”), representing 8.73% and 7.64% of the total paid-up equity share capital and free reserves as per the audited standalone and consolidated balance sheet of the Company as on December 31, 2020, respectively, from all existing shareholders of the Company on the record date determined by the Board of Directors i.e. Friday, August 27, 2021, on a proportionate basis through “Tender Offer” route.

Salient financial parameters:

Particulars (in Crores) Dec 2016 Dec 2017 Dec 2018 Dec 2019 Dec 2020
Sales 588 593 700 809 881
Expenses 518 560 643 736 773
Operating Profit 71 33 57 73 108
OPM % 12% 6% 8% 9% 12%
Other Income 17 16 19 15 20
Interest 1 0 0 2 6
Depreciation 12 13 14 15 26
Profit before tax 76 35 63 72 97
Tax % 29% 36% 19% 19% 15%
Net Profit 54 23 51 58 82
EPS in Rs 4.33 1.82 4.12 4.83 6.87

How to Participate in buyback?

1. Firstly to be eligible for the buyback the investor should have shares of R Systems Buyback 2021 in demat or physical form as on record date [27.08.2021] 2. Once you have shares in demat, you can participate in the buyback process which is opening from [Not Announced] by selling your shares through your broker on NSE or BSE. 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.

Profit from the buyback on the bases of acceptance Ratio:

Buy 888 Shares at CMP of Rs. 194 (2,00,000/225=888)
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback 1,72,444 1,72,444 1,72,444 1,72,444
No. of Shares buyback 293 444 666 888
BuyBack Profit 9083 13764 20646 27528
Profit 5.26% 7.98% 12% 16%
 

Recommendation:

Review and Recommendation of R Systems Limited Buyback 2021 by IZ team is: 4/10

Fair: 1-5

Good:5-7

Excellent: 7-10

[Currently the expected ER is around 5-6% . The good part is the record date is near i.e. 27.08.2021. The stock may move to 225 level as we approach near the record date. If that happens, the AR will be improved significantly. The results of the company for FY20-21 are very good.]

15 Comments

    Sold some shares @224/-. I will render the balance of shares for buyback depending upon the situation n price. Thank you.

    I received email today.
    AR=28/400 i.e. 7%
    Opening 20.09
    Closing 01.10
    Settlement 12.10.
    Umeshji, what could be expected?

        Let us hope that the Market price for the unaccepted shares will be between Rs.210/- to Rs.220/- and the AR will be not less than 15%. Thank you.

        It has already touched Rs.224.40 . I have sold 50% of my holdings @Rs.224/. Good going. All the best to all the investors. Enjoy the fruits of profit.

    I purchased 900 @ 195. Before record date. Sold 400 @ 212. After record date .holding 400 for buyback. Ready to sale if received 220 . Before buyback

      Selling price @Rs.212/- is quite a reasonable one. If you can sell the unaccepted shares @ not below Rs.215/, it serves the purpose of the buyback of shares. Best of luck and happy investing. Thank you.

      PS Sir/ Madam,
      Though I am not having much experience in this regard, I am learnt that the company is a good one and you will definitely be benefitted in the process of buyback. Please go for it.

    BUY BACK PRICE IS RS 225/
    Record date 27/8/2021
    Through Tender offer
    Quantity of buyback 13,33,000 share
    Pray for views/ guidance of Experts as early as possible.

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