R SYSTEMS INTERNATIONAL LIMITED Buyback 2019

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 Computaris.

Buy Back Offer Deal:

Buyback Type: Tender Offer
Buyback Record Date: Feb 01 2019
Buyback Offer Amount: ₹ 23.985 Cr
Date of Board Meeting approving the proposal: Jan 15 2019
Date of Public Announcement: Jan 15 2019
Buyback Offer Size: 9.87%
Buyback Number of Shares: 3,690,000
FV: 1
Buyback Price: ₹ 65 Per Equity Share

Details of Buyback:

The proposal for Buyback of Equity Shares of the Company, up to 3,690,000  fully paid-up Equity Shares of Re. 1/- each of the Company (representing 2.98% of the total number of equity shares in the paid-up share capital of the Company) at a price of Rs. 65/-payable in cash for an aggregate consideration not exceeding Rs. 239,850,000 representing 9.87% of the total paid-up equity share capital and free reserves as per the audited standalone balance sheet of the Company as on December 31, 2017, from all existing shareholders of the Company on the record date determined by the Board of Directors i.e. Friday, February 01, 2019, on a prop01iionate basis through "Tender Offer" route.

How to Participate in buyback?

1. Firstly, to be eligible for the buyback the investor should have shares of R SYSTEMS INTERNATIONAL LIMITED Buyback 2019 in demat or physical form as on the record date [01.02.2019 ]. 2. Once you have shares in demat, you can participate in the buyback process which is opening from [Not Announced Yet] by selling your shares through your broker on NSE or BSE. 3. Then on [Not Announced Yet], 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 3076 Shares at CMP of Rs. 53.7 [2,00,000/65=3076]
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback 1,65,231 1,65,231 1,65,231 1,65,231
No. of Shares buyback 1015 1538 2307 3076
BuyBack Profit 11469 17379 26069 34758
Profit 7% 11% 16% 21%

Recommendation:

Review and Recommendation of  R SYSTEMS INTERNATIONAL LIMITED Buyback 2019 by IZ team is: 4/10 Fair: 1-5 Good:5-7 Excellent: 7-10 [ In the Year 2016 the company has issued a buyback of 30 lakh shares at Rs.65 which was having 90% of Acceptance Ratio. This time also the size and price are almost the same. This time also we can expect of more than 60% of Acceptance Ratio.]

    should we participate in this buyback
    kindly do the analysis on expected acceptance ratio and potential upside or downside

      Just buying for buyback will be very risky. Stock as already run up and only about 3 crores worth reserved for retailers

        Agree with Gaurav Jii. Last time they did buyback around the same price. Maybe Promoters are just using this buyback method to fill their pocket.

    Buyback Analysis of R System in 2016

    1. Buyback Announcement date: 14.09.2016—– Share Price was 60.65., Buyback Size= 30 Lakhs, Total Size= 19.5 Cr.

    2. 3076 Shares bought at Rs. 60.65 means an investment of 1,86,559.

    3. Entitlement Ratio for Retail Category was 7.46%.

    4. Final Acceptance Ratio was 90%.

    5. Date of Opening and Closing on = 07.11.2016 to 21.11.2016.

    6. Settlement Date= 29.11.2016 and Share Price on 29.11.2016 was 58.75.

    7. Total Profit.

    Retail Acceptance Ratio was 90%. i.e. out of 3076 shares, 2768 shares have been buyback by the company. Profit on Accepted Shares= 12171

    The unaccepted Shares were given back on 29.11.2016. The share price on 29.11.2016 was 58.75 . So if you sell the remaining 307 shares at 58.75, then a loss of 307*1.9= 583

    8. Overall we can say a profit of 11587 on an investment of 1,86,559 in less than 2 months.

    Rsystem approved buyback at 65 Rs. Through tender route