Ramkrishna Forgings Limited Buyback 2020

(i) Ramkrishna Forgings Limited was founded on 12th November 1981 on a bed of integrity, fueled by burning ambition. Years of staying true to its principles and tireless endeavors, they have produced rich results. They became a limited company on 25th May 1995 and today they are an organization manned by qualified and highly skilled people with state-of-the-art manufacturing facilities and international levels of quality control.

(ii) They are suppliers to various sectors like Automotive, Railways, Farm Equipment, Bearings, Oil & Gas, Power and Construction, Earth Moving & Mining, both in India & overseas markets.

They are also a critical safety item supplier for Screw Coupling, Bolster suspension, Side frame keys and Draw Gear Assembly for Railway Coaches and wagon. We are a preferred supplier to OEM’s like TATA Motors, Ashok Leyland, VE Commercial and Daimler in India and to Volvo, Mack Trucks, Iveco, Ford in the overseas markets. They supply globally to Tier 1 axle manufacturers like Dana, Sisamex, Meritor and American Axles.

Buy Back Offer Deal:

Buyback Type: Open Market
Buyback Opening Date: Apr 03 2020
Buyback Closing Date: Sep 27 2020
Buyback Offer Amount: ₹ 40 cr
Date of Board Meeting approving the proposal: Mar 21 2020
Date of Public Announcement: Mar 21 2020
Price Type: Open Market
FV: 10
Buyback Price: ₹ 250 Per Equity Share

Details of Buyback:

RAMKRISHNA FORGINGS LTD has informed BSE that in the meeting of the Board of Directors of the Company held on 21.03.2020, has approved a buyback of shares worth Rs. 40 Cr from Open Market at a price not exceeding Rs. 250 per share.

Salient financial parameters:

Particulars( in Cr) Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19
Sales + 434 754 908 921 1,491 1,931
Expenses + 374 623 727 758 1,202 1,545
Operating Profit 60 131 181 163 289 386
OPM % 14% 17% 20% 18% 19% 20%
Other Income 1 12 2 7 4 3
Interest 23 32 55 78 73 84
Depreciation 25 32 53 75 85 121
Profit before tax 13 79 75 17 135 184
Tax % 35% 5% 27% 33% 30% 35%
Net Profit 8 75 55 11 95 120
EPS in Rs 3.07 27.05 18.6 3.91 29.13 36.84
Source: Screener.in

How to Participate in buyback?

In this method of share Buyback, the company will be purchasing stocks from existing shareholders of the company directly from the market. Example: “Ramkrishna Forgings Limited Buyback 2020” announces the buyback plan of its shares up to the price of Rs 250, it means that the company will be purchasing shares of "Ramkrishna Forgings Limited Buyback 2020" from the open market at a price not exceeding Rs.250 per share. Scenario 1- If the share price is below Rs. 250 in that case, the company will put buy orders at the current market price and purchase shares. Scenario 2- If the share price is above Rs. 250, in that case, the company will put buy order at Rs. 250 only and if someone is ready to sell at Rs.250 or less then the only company will get back shares.

Profit from the buyback on the bases of acceptance Ratio:

NA as it is open market buyback.

Recommendation:

It is an open market buyback.