Smartlink Network Systems Limited Buyback Apr 2018

Smartlink Network Systems Limited Buyback

Smartlink Network Systems Limited is one of India’s leading networking company. It was established in the year 1993 to prop the Indian market in the field of Network Infrastructure. Pioneer in the field of Active networking, it offers an integrated value proposition from design and development to sales and marketing, and service and support. The Company has a robust product portfolio and a nationwide reach through its network of national and regional distributors, resellers and system integrators.
Our business outline includes :
DIGISOL – Active Networking Solutions
DIGILITE – Motherboards and More
DIGICARE – Service & Support
DIGITAB – Tablets
Research & Development
Electronic Manufacturing Services
Contract & In-house Manufacturing
Our network comprises of
10 Branch Offices.
22 Regional Distributors
Over 200 Empower Value System Integrators (EVSI)
Over 1000 Empower Value Added Resellers (EVAR)
Over 5000 Empower Authorised Partners (AP)
We work closely with our channel partners and system integrators who value the power and quality of our products.
We also invest considerably in training and empowering our channel partners to build their technical expertise as well as enhance our brand positioning and visibility in the industry.
Our market know-how and in-depth understanding have led us to emerge as pioneers in delivering end-to-end products and our customers cover a broad spectrum – from small and medium business segments to the enterprise market.Smartlink Network Systems Limited Board has approved a proposal for buyback of up to 56 lakh shares at Rs 120 per share, aggregating Rs 67.2 Cr which is 4.83% of the total paid­up equity capital of the Company

Buy Back Offer Deal:

Buyback Type: Tender Offer
Buyback Record Date: May 18 2018
Buyback Opening Date: Jun 13 2018
Buyback Closing Date: Jun 26 2018
Buyback Offer Amount: ₹ 67.20 Cr
Date of Board Meeting approving the proposal: Apr 07 2018
Date of Public Announcement: Apr 07 2018
Buyback Offer Size: 24.83%
Buyback Number of Shares: 56 Lacs
FV: 2
Buyback Price: ₹ 120 Per Equity Share

Details of Buyback:

Smartlink Network Systems Limited Buyback

The Board of Directors of Smartlink Holdings Limited at its meeting held on April 7, 2018, has approved the Buyback of up to 56,00,000 (Fifty-Six Lakhs Only) Equity Shares at a price of Rs. 120/ (Rupees One Hundred and Twenty Only) per Equity Share up to an aggregate amount not exceeding Rs. 67,20,00,000/- (Rupees Sixty Seven Crores Twenty Lakhs only) excluding the transaction costs viz. brokerage, advisors’ fees, printing and dispatch expenses, applicable taxes such as securities 13 transaction tax, goods and service tax, stamp duty and other related and incidental expenses, which works out to be 20.11% of the aggregate of the fully paid-up share capital and free reserves as per the audited accounts of the Company as on March 31, 2017 through the "Tender Offer" route as prescribed under the Buyback Regulations on a proportionate basis, from the equity shareholders / beneficial owners of the Equity Shares of the Company as on the Record Date.

Salient financial parameters:

Parameters Standalone
     Pre-Buyback      Post- Buyback
(i) Net worth (in Crore) 335.87 268.67
(ii) Return on Net worth (%) 1.54% 1.92%
(iii)Earnings Per Share 2.12 3.05
(iv) Book Value per Share 148.94 158.51
(v) P/E        46.16 32.08
(vi) Total Debt/ Equity Ratio -- --

Source of funds for the Buyback:

1. Assuming full acceptance, the funds that would be deployed by the Company for the purposes of the Buyback would be Rs. 67,20,00,000/- (Rupees Sixty Seven Crores Twenty Lakhs only) excluding transaction costs viz. brokerage, advisors’ fees, printing and dispatch expenses, applicable taxes such as securities transaction tax, goods and service tax, stamp duty and other related and incidental expenses. 2. The fund for the Buyback will be sourced out of the free reserves of the Company (including Securities Premium Account) or such other source as may be permitted by the Buyback Regulations or the Act. The Company shall transfer from its free reserves a sum equal to the nominal value of the equity shares bought back through the Buyback to the Capital Redemption Reserve Account and details of such transfer shall be disclosed in its subsequent audited financial statement. The funds borrowed, if any, from banks and financial institutions, will not be used for the Buyback.

Shareholding Pattern Pre and Post buyback:

 Particulars        Pre-Buyback      Post- Buyback
 Equity Shares % Equity Shares %
(i) Promoters and Members of Promoter Group 16,786,815 74.44 -- --
(ii) Foreign Investors (including NRIs, FIIs and Foreign MFs) -- -- -- --
(iii) Financial Institutions / Banks & Mutual Funds -- --
(iv) Others -- --
 Total 22,550,000 100.00 16,950,000 100

How to Participate in buyback?

How to Participate in Smartlink Network Systems Limited Buyback Offer: 1. Firstly to be eligible for the buyback the investor should have shares of Smartlink Network Systems Limited in demat or physical form as on record date 18 May 2018. 2. Once you have shares in demat, you can participate in the buyback process which is opening from [.] by selling your shares through your broker on NSE or BSE. 3. Then on [.], 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:

Smartlink Network Systems Limited Buyback offer calculation for an investment of Rs 2,00,000 @105 per share
% Share Accepted No of Shared Accepted Gain from Buyback Offer
33% 629 Rs 9435
50% 952 Rs 14280
75% 1429 Rs 21435
100% 1905 Rs 28575

Recommendation:

Review and Recommendation of Smartlink Network Systems Limited Buyback from our side is: Rating: 3/10 Fair: 1-5 Good: 5-7 Excellent: 7-10

Registrar Contact Details:

Karvy Computershare Private Limited Karvy Selenium Tower B, Plot No. 31-32, Gachibowl Hyderabad - 500032 Telangana

Company Contact Details:

Smartlink Network Systems Limited L-7, Verna Industrial Estate, Verna, Salcete, Goa