Welspun India Limited Buyback Offer 2021

Welspun is a fully integrated player within the Line Pipes and Home Textiles sectors, with a significant presence in Infrastructure development, spanning Roads, Water and Oil & Gas. As a globally recognised industry leader, the group has a worldwide reach panning more than 50 countries, and employing over 26,000 people across geographies, ethnicities and cultures.

Welspun’s vast global footprint allows the group to leverage business associations with a marquee of esteemed clients, especially within the Oil & Gas and Retail sectors. In Line Pipes, we are the partners of choice for some of the most challenging projects for the largest players in the global Oil and Gas industry.

Buy Back Offer Deal:

Buyback Type: Tender Offer
Buyback Record Date: May 26 2021
Buyback Offer Amount: ₹ 200 Crores
Date of Board Meeting approving the proposal: May 14 2021
Date of Public Announcement: May 14 2021
Buyback Offer Size: 6.36%
Buyback Number of Shares: 1,66,66,667
Price Type: Tender Offer
FV: 1
Buyback Price: ₹ 120 Per Equity Share

Details of Buyback:

The Board of Directors of the Company at their meeting held on May 14, 2021, have approved buyback proposal for purchase of fully paid equity shares of Re. 1 each (“Equity Share”) by the Company at a price of Rs. 120/- (Rupees One Hundred and Twenty Only) per Equity Share payable in cash (“Buyback Price”), for an aggregate amount of Rs. 200 Crore (Rupees Two Hundred Crore Only) (“Buyback Size”) (excluding expenses incurred or to be incurred for the Buyback like filing fees payable to the Securities and Exchange Board of India, advisor’s fees, public announcement publication expenses, printing, dispatch expenses, transaction costs viz. brokerage, applicable taxes such as buyback taxes, securities transaction tax, goods and service tax, stamp duty, etc.), representing 6.36% of the total paid-up equity share capital and free reserves via "Tender Route"

Salient financial parameters:

Particulars (in Crores) Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21
Sales 5,264 5,924 6,638 6,050 6,527 6,741 7,340
Expenses 3,987 4,328 5,071 4,927 5,487 5,526 5,988
Operating Profit 1,278 1,595 1,566 1,123 1,039 1,215 1,352
OPM % 24% 27% 24% 19% 16% 18% 18%
Other Income 91 88 -367 81 -157 139 68
Interest 283 237 158 141 159 178 198
Depreciation 333 372 505 504 436 481 454
Profit before tax 753 1,074 536 560 287 694 769
Tax % 28% 30% 32% 29% 21% 24% 28%
Net Profit 540 736 358 385 210 507 540
EPS in Rs 5.37 7.33 3.56 3.83 2.09 5.05 5.37
Dividend Payout % 20% 18% 18% 17% 14% 20% 3%
Source: Screener

How to Participate in buyback?

1. Firstly to be eligible for the buyback the investor should have shares of Welspun India Limited Buyback Offer 2021 in demat or physical form as on record date [26.05.2021] 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 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 1666 Shares at CMP of Rs. 101 (2,00,000/120=1666)
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback 1,68,266 1,68,266 1,68,266 1,68,266
No. of Shares buyback 550 833 1250 1666
BuyBack Profit 10,450 15,833 23,750 31,654
Profit 6.21% 9.41% 14.11% 18.81%

Recommendation:

Review and Recommendation of Welspun India Limited Buyback Offer 2021 by IZ team is: 4/10 Fair: 1-5 Good:5-7 Excellent: 7-10 [ Entitlement = 10% ]

8 Comments

        Your info was incorrect.
        I bought on Monday, but shares reached DMAT after record date..

    *Buyback Tip*

    As per section 10(34A), any income arising to a shareholder (including ESOP-shares) on account of buyback of shares by the company shall be exempt in the hands of such shareholders. Further, as per section 115QA, the tax @ 20% shall be paid by the unlisted company on the buyback of its shares.

    In nutshell, Profit/Gain (STCG/LTCG) arising on Buyback of Shares shall be *Tax Exempt* u/s 10(34A)

    #Buyback #unk

      What could be the proper price to purchase for Buy Back only [not for investment] and expected ER/AR?

      Does anyone know how to show this income that arises from buyback profit in ITR2?

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