Rishiroop Ltd Buyback 2021

Formerly known as Puneet Resins Ltd., Rishiroop Ltd. is the merged entity of Puneet Resins Ltd. and Rishiroop Rubber (International) Ltd. The company is listed on the Bombay Stock Exchange.

They are the pioneers to manufacture both Chlorinated Rubber (sold under our brand name Chlorub) and Acrylonitrile Butadiene Rubber (NBR) and Poly-vinyl Chloride (PVC) polymer blends (NBR / PVC Blends – sold under its brands Vinoprene & Vinoplast) in India and are referred to as the benchmark for quality in the industry. Its products are exported across the world and it is always interested to explore new markets.

With a core competence in rubber, coatings & adhesives, the group companies today also cater to the construction, household / industrial cleaning, inks, leather auxiliaries, mining, oil and gas, paper, personal care, pharmaceuticals, plastics, poly-urethanes and textiles industries.

Buy Back Offer Deal:

Buyback Type: Tender Offer
Buyback Record Date: Sep 09 2021
Buyback Offer Amount: ₹ 8 Crores
Date of Board Meeting approving the proposal: Aug 27 2021
Date of Public Announcement: Aug 27 2021
Buyback Offer Size: 9.67%
Buyback Number of Shares: 640000
Price Type: Tender Offer
FV: 10
Buyback Price: ₹ 125 Per Equity Share

Details of Buyback:

The Board of Directors of the Company at their meeting held on August 27, 2021, have approved buyback proposal up to 6,40,000 fully paid-up equity shares of face value of Rs. l0/- each of the Company ("Equity Shares") representing up to 6.60 % of the total number of Equity Shares of issued and paid-up Equity Share capital of the Company at a price ofRs. 125l- per Equity Share ("Buy Back Price") (including premium of Rs. I 15/- per Equity Share) payable in cash for an aggregate amount of up to Rs. 8,00,00,000/- (excluding transaction costs such as brokerage, Buyback ta-x, securities transaction tax, goods and service tax, stamp duty etc.)("Buyback Size"), which is 9.67 % of the fully paid-up equity share capital and free reserves, as per the audited balance sheet of the Company as on March 31,202, on a proportionate basis through tender offer ("Tender Offer") as prescribed under Buyback Regulations, to all the equity shareholders/ beneficiary owners who hold Equity Shares on the Record Date ("Buyback"). The Buyback Size does not include any expenses incurred or to be incurred for the Buyback like filing fees payable to the Securities and Exchange Board of india, fees and charges payable to Stock Exchanges, public announcement expenses, printing and dispatch expenses and other incidental and related expenses.

Salient financial parameters:

Particulars Mar 16 Mar 17 Mar 18 Mar 19 Mar 20 Mar 21
Revenue 38 47 60 61 41 55
Expenses 37.00 43.00 51.00 54.00 44.00 48
Operating Profit 1 4 9 7 -3 7
OPM % 3.00% 8.00% 15.00% 11.00% -8.00% 12%
Other Income 3 6 3 2 1 33
Depreciation & Amortisations 1 1 1 0 1 0
Profit Before Tax 3 9 12 9 -3 38
Tax % 21% 19% 32% 14% 14% 22%
Profit After Tax 2 7 8 7 -3 30
EPS 4.72 7.59 8.33 7.52 -2.93 30.92

How to Participate in buyback?

1. Firstly to be eligible for the buyback the investor should have shares of Rishiroop Ltd Buyback Offer 2021 in demat or physical form as on record date [09.09.2021] 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. 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 1600 shares at CMP of Rs.111 [2,00,000/125 = 1600]
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback 177600 177600 177600 177600
No. of Shares buyback 528 800 1200 1600
BuyBack Profit 7,392 11,200 16,800 22,400
Profit% 4% 6% 9% 13%

Recommendation:

Review and Recommendation of Rishiroop Ltd Buyback 2021 by IZ team is: 4/10 A very small buyback of just 8 Crores. Arbitrage is also very small. [ER =8-10%]

2 Comments

      How the AR can be 30% to 40% when the size of the buyback is a small one. The only reason for your assumption may probably be the little margin between the CMP n Buyback price. Happy investing n best of luck.

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