Tips Industries Limited Buyback 2020

(i) Tips Industries Limited is an entertainment company. The Company is engaged in the business of audio/video products, film production, and distribution. The Company’s segments include Audio/Video productions and Film productions/Distribution. It also owns the RACE franchise, which is a Hindi film franchise. In addition, the Company produces Punjabi films.

(ii) The Company’s music business includes a digital library of approximately 25,000 songs. Its music business includes albums, such as kaptaan, ambarsariya, mehndi laga ke-bollywood wedding hits, karle baby dance wance-dance beat collection and loveshhuda; tracks, such as pagg wala munda, ju think, redua and oscar, and ringtones, including aa bhi jaa sanam and mar jaayen, among others. The Company also produces Hollywood and Bollywood films. The Company’s films include jihne mera dil luteya, prince, toh baat pakki, kismet connection, race, and naqaab, among others.

Buy Back Offer Deal:

Buyback Type: Tender Offer
Buyback Offer Amount: ₹ 18.90 Cr
Date of Board Meeting approving the proposal: Feb 13 2020
Date of Public Announcement: Feb 13 2020
Buyback Offer Size: 9.23%
Buyback Number of Shares: 1350000
Price Type: Tender Offer
FV: 10
Buyback Price: ₹ 140 Per Equity Share

Details of Buyback:

The buy-back of up to 13,50,000 fully paid equity shares of the face value of Rs. 10/- each at a price of up to INR 140 per share aggregating up to INR 18.90 Crores which represents 24.62% of the paid-up equity share capital and free reserves of the Company through " Tender Route".

How to Participate in buyback?

1. Firstly to be eligible for the buyback the investor should have shares of Tips Industries Limited Buyback 2020 in demat or physical form as on record date on [ Not Announced ] 2. Once you have shares in demat, you can participate in the buyback process which is opening from [ Not Announced ] by selling your shares through your broker on NSE or BSE. 3. Then on [ Not Announced ], the settlement will be done for accepted shares and unaccepted shares will be returned to your demat account

Profit from the buyback on the bases of acceptance Ratio:

Buy 1428 Shares at CMP of Rs.127( 2,00,000/140=1428)
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback 181356 181356 181356 181356
No. of Shares buyback 471 714 1071 1428
BuyBack Profit 6,126 9,282 13,923 18,564
Profit 3.38% 5.12% 7.68% 10.24%

Recommendation:

Review and Recommendation of from our side is Tips Industries Limited Buyback 2020 : Rating: 4/10

    Total Share to be buyback= 13,50,000 shares

    Retail quota = 2,02,500 shares

    Shareholding quota up to 31.12.2019

    No. of shareholders up to 2 lac of paid-up capital = 16,86,381 Equity shares

    So, Entitlement would be = 12%, however, as the current market price is around buyback price, the entitlement would be high.

    TIPS industries have come up with good bottom-line growth in spite of sharp top-line degrowth in the first 9MFY20.

    1. Revenue for 9MFY20 = 89 Cr vs 207 Cr in 9MFY19.

    2. PAT for 9MFY20 = 11.04 Cr vs 1.92 Cr in 9MFY19.

    The Board took note of the intention of members of the promoter and promoter group including
    the person in control of the Company to participate in the proposed buyback.