Techno Electric & Engineering Buyback 2022

TEECL is a leading EPC services company in India’s power sector. The Company provides engineering, procurement, and construction services to all three industry segments(generation, transmission and distribution). It was engaged in setting up (in one capacity or other) over 50% of India’s thermal power generating capacity and a major portion of the national power grid. The Company also possesses specific domain knowledge that enables it to serve the EPC needs of power, steel, fertilizer, metals and petrochemicals sectors, among others.

The two major business segments of the Company’s presence comprise engineering, procurement and construction (EPC) for the power sector and power generation (non-conventional).

The Company is headquartered in Kolkata, West Bengal (India) with marketing offices in three Indian states.

The Company employs 400 professionals (engineering, commercial, graduates and postgraduates). The engineering team possessed an average experience of more than 29 years as on March 31, 2015.

Business Model of the Company

1. EPC-

Power Generation> Transmission and Distribution > Industrial Sector

They provide EPC services to all three segments of India’s power sector – generation, transmission and distribution.

2. Wind Generation

They are an independent renewable energy producer with 129.9 MW wind energy capacity.

3. PPP

They are associated with building transmission linkages. They have a 25- year concession in consortium with Kalpataru Power for a transmission link at
Jhajjar, Haryana.

Buy Back Offer Deal:

Buyback Type: Open Market
Buyback Offer Amount: ₹ 130 Cr.
Date of Board Meeting approving the proposal: Jul 11 2022
Date of Public Announcement: Jul 11 2022
Buyback Offer Size: 7.26%
Buyback Number of Shares: 40,00,000
FV: 2
Buyback Price: ₹ 325 Per Equity Share

Details of Buyback:

Techno Electric & Engineering board of directors of the company at its meeting held on i.e. 11.07.2022 considered and approved the proposal for buyback of fully paid-up Equity Shares of the face value of Rs.2/- not exceeding 40,00,000 Equity Shares (representing 7.26% of the total number of equity shares in the paid-up equity share capital of the Company) for an aggregate amount of Rs.130 Cr Only, of the total paid-up equity share capital and free reserves of the company as on March 31, 2022 at a price of Rs.325 on " Open Market Basis"

Salient financial parameters:

Particular ( Cr. )  Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22
Sales 120 1,283 986 871 884 1,074
Expenses 10 988 736 654 668 852
Operating Profit 110 295 250 217 216 222
OPM % 91% 23% 25% 25% 24% 21%
Other Income 19 42 73 48 67 151
Interest 21 25 13 7 9 6
Depreciation 37 42 42 42 41 41
Profit before tax 70 271 268 216 232 326
Tax % 20% 24% 28% 17% 22% 20%
Net Profit 56 206 193 179 182 264
EPS in Rs 0.63 2.31 17.16 16.28 16.53 23.99
Dividend Payout % 0% 0% 0% 0% 61% 8%

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: “Techno Electric & Engineering” announces buyback plan of its shares up to value of Rs 325, it means that the company will be purchasing shares of "Techno Electric & Engineering " from the open market at a price not exceeding Rs.325 per share. Scenario 1- If the share price is below Rs. 325 in that case, the company will put buy order at Current Market Price and purchase shares. Scenario 2- If the share price is above Rs. 325, in that case, the company will put buy order at Rs. 325 only and if someone is ready to sell at Rs.325 or less then only company will get back shares.

Profit from the buyback on the bases of acceptance Ratio:

As It's Open Market Buyback Therefore No arbitrage is available.

Recommendation:

As It's Open Market Buyback Therefore No arbitrage is available.

Company Contact Details:

Techno Electric & Engineering Limited 508-509, Skipper Corner 88, Nehru Place, Delhi 110019

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