SKP Securities Limited Buyback Offer 2019

SKP Securities Limited is a financial services company. The Company is engaged in distribution of financial products and broking service. It operates through Broking & Dealing in Securities and related services segment. The Company’s services include distribution, wealth advisory, investment banking and institutional equities. The Company also offers research and advice based services, such as equities and equity derivatives, commodity futures, currency futures, depository services, mutual funds, insurance and financial planning. The Company’s subsidiaries include SKP Commodities Limited, and SKP Insurance Advisors Pvt Limited.

Buy Back Offer Deal:

Buyback Type: Tender Offer
Buyback Offer Amount: ₹ 6.965 Cr
Date of Board Meeting approving the proposal: Apr 27 2019
Date of Public Announcement: Apr 27 2019
Buyback Offer Size: 22.12%
Buyback Number of Shares: 9,95,000
Price Type: Tender Offer
FV: 10
Buyback Price: ₹ 70 Per Equity Share

Details of Buyback:

Approved the proposal to Buyback up to 9,95,000 fully paid up equity shares of the company (representing 22.112% of the total number of equity shares in the paid-up share capital of the Company) at a price of Rs. 70/- (Rupees Seventy Only) per equity share payable in cash for an aggregate consideration of Rs. 69,650,000/- (Rupees Six Crore Ninety Six Lacs Fifty Thousand Only) on a proportionate basis through the Tender Offer route in accordance.

Salient financial parameters:

(in Cr.) 2018 2017 2016
Income Statement
Revenue 17.39 10.75 10.46
Other Income 0.83 0 0.01
Total Income 18.22 10.75 10.46
Expenditure -10.1 -8.66 -8.6
Interest -0.27 -0.24 -0.03
Net Profit 6.24 1.24 1.1
Equity 4.4 5.62 5.62
EPS 12.55 2.2 1.96
OPM % 46.67 19.4 17.78
NPM % 35.87 11.5 10.51
Source: BSE Limited

How to Participate in buyback?

1. Firstly to be eligible for the buyback the investor should have shares of SKP Securities Limited Buyback Offer 2019 in demat or physical form as on record date. [ Not Announced Yet ] 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 2857 Shares at CMP of Rs. 65.20 [2,00,000/70 =2857)
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback 1,86,276 1,86,276 1,86,276 1,86,276
No. of Shares buyback 942 1428 2142 2857
BuyBack Profit 4653 7054 10581 14113
Profit 2.49% 3.78% 5.68% 7.57%

Recommendation:

Review and Recommendation of SKP Securities Limited Buyback 2019 by IZ team is: 3/10 Fair: 1-5 Good: 5-7 Excellent: 7-10 (i) The Financial performance of the company is very poor in 2019 as compared to last year. The Revenue is down by 45 %, PAT is down by 64% and EPS has come down to 4.19 from 10 last year.] (ii) [Acceptance Ratio = 40-50%.]

    (i) As on 31.03.2019, the number of shares up to 2 lacs are 3,95,018.

    (ii) The number of Shares reserved for Retail Shareholders is 1,49,250.

    (iii) Entitlement based on this is = 38%

    As investors, we should wait for record date to announce as price may tank on Monday due to poor results. Don’t jump on Monday to buy considering buyback.

    A buyback may be to hide poor results.

      Your figure of no of share holders is wrong. As on march 2019, 395,018 shares are held by 1,225 shareholders

    Taken on record the Intention of the Promoters of the Company to the proposed Buyback.