Suprajit Engineering Buyback 2021

Born of Entrepreneurial spirit in 1985, Suprajit today has carved a niche for itself as a pioneer in the design and manufacture of Mechanical Control Cables and is recognized as India’s largest cable maker and worlds largest in the two-wheeler cable market. As a part of its Strategic expansion into Non-Automotive-Cables and Controls market Suprajit acquired Wescon Controls Inc USA in 2015 and had also diversified into Automotive Lighting business through acquisition of Phoenix Lamps Limited in 2014.

Head Quartered in Bangalore- India Suprajit has transitioned from a single product, single customer, single segment, single brand, single location company to a multi-product, multi-business, multi-customer, multi-brand, multi-location global company making it truly diversified without sacrificing its tenets on Quality, Cost, Delivery and Development. It is driven by its single-minded goal of “Customer Satisfaction” and in this pursuit of excellence it continues be recognised as “Value for Money Supplier” to customers across the spectrum.

The Suprajit Group is a global leader in the automotive cable and halogen bulb industry. With a competitive manufacturing base in India, UK, US and Mexico, along with our technical and logistical supports worldwide, the group provides the optimal product development and manufacturing solutions to its domestic and international customers. The Group comprises of Suprajit Engineering Limited (which includes Phoenix Lamps), Suprajit Automotive Limited, Suprajit Europe Limited, Wescon Controls LLC, and Suprajit Inc USA.

With a compounded annual growth of over 25+%, the group has one of the largest manufacturing capacities in world with 300+ million cables per year and 80+ million bulbs per year.

Buy Back Offer Deal:

Buyback Type: Tender Offer
Buyback Record Date: Feb 22 2021
Buyback Opening Date: Apr 08 2021
Buyback Closing Date: Apr 26 2021
Buyback Offer Amount: ₹ 48 Crores
Date of Board Meeting approving the proposal: Feb 10 2021
Date of Public Announcement: Feb 10 2021
Buyback Offer Size: 1.07%
Buyback Number of Shares: 1500000
Price Type: Tender Offer
FV: 1
Buyback Price: ₹ 320 Per Equity Share

Details of Buyback:

Approved the proposal to buy-back up to 15,00,000 Equity Shares (Fifteen Lakhs only) of Re.1/- each of the Company for an aggregate amount not exceeding Rs. 48,00,00,000 {Rupees Forty Eight Crores only) (hereinafter referred to as the "Buyback Size") being 1.07% of the total paid-up equity share capital, at Rs. 320/- (Rupees Three Hundred Twenty only) per Equity Share (hereinafter referred to as the "Buyback Price") and fixed Monday, "February 22, 2021" as "RECORD DATE"

Salient financial parameters:

Particulars (in cr) Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20
Sales + 605 940 1,203 1,431 1,590 1,563
Expenses + 508 790 1,005 1,194 1,357 1,344
Operating Profit 97 150 198 237 233 219
OPM % 16% 16% 16% 17% 15% 14%
Other Income 4 16 24 21 38 -5
Interest 17 26 30 27 25 23
Depreciation 9 16 27 37 41 58
Profit before tax 75 123 164 193 205 133
Tax % 33% 35% 31% 28% 35% 22%
Net Profit 50 72 114 138 134 104
EPS in Rs 4.19 5.48 8.66 9.9 9.57 7.43
Dividend Payout % 23% 19% 17% 14% 16% 24%
Source: Screener.in

How to Participate in buyback?

1. Firstly, to be eligible for the buyback the investor should have shares of Suprajit Engineering Buyback 2021 in demat or physical form as on the record date [22.02.2021] 2. Once you have shares in demat, you can participate in the buyback process which is opening from [08.04.2021 to 26.04.2021] by selling your shares through your broker on NSE or BSE. 3. Then on [05.05.2021], 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 625 Shares at CMP of Rs.245 [200000/320=625]
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback 1,53,125 1,53,125 1,53,125 1,53,125
No. of Shares buyback 206 313 469 625
BuyBack Profit 15468 23437 35156 46875
Profit(%) 10.10% 15.31% 22.96% 30.61%

Recommendation:

Review and Recommendation of Suprajit Engineering Buyback 2021 by InvestorZone team is: 3/10 The buyback size of 48 Crores is very small. Out of ~14 Crores of equity shares outstanding, Suprajit is doing buyback of 15 Lakh Shares. On top of that, the promoters will also participate. If we see the Annual report of 2020, the total shareholders which have shares between 1-500 and 501-1000 are 41797 holding ~73 Lakh shares, and shares reserved for retail shareholders in buyback is just 2.25 lakh. So, AR based on that would be 3-5%.

Final Entitlement

Category of Shareholders Ratio of Buyback
Reserved Category 3 Equity Shares out of every 82 fully paid-up Equity Shares held on the Record Date
General Category 4 Equity Shares out of every 441 fully paid-up Equity Shares held on the Record Date.

10 Comments

    Still Suprajit buyback link not a available on internet or suprajit website or integrated website

    I believe 1.07% is too low and therefore doesn’t make sense for buying for selling in buyback…

    Ignoring..

    The buyback is proposed to be made from the shareholders of the Company, including Promoters and Promoter Group on a proportionate basis under the ‘Tender Offer’

    CMP-243.80 (10-Feb-2021)
    BuyBack Price:- 320.00/-
    Dividend:- 0.75 /share (same record date as buyback)
    Arbitrage:- 35%
    BuyBack Type:- Tender Offer
    Total BuyBack Size- 1.07% of the total paid-up equity share capital / 15,00,000 Equity Shares
    Promoter Participation- Yes .
    Record Date:- Monday, “February 22, 2021”

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