Zydus Lifesciences Limited Buyback 2024
Zydus Lifesciences Limited is a leading Indian Pharmaceutical company that offers healthcare services globally. The company manufactures formulations, APIs, vaccines, biosimilars, complex products (transdermals, topical etc.), animal health products as well as wellness products.
Zydus Lifesciences Limited has more than 30 manufacturing plants worldwide including India, Germany, Brazil & USA. Zydus Lifesciences Limited is the fourth largest pharmaceutical company in India. Zydus Lifesciences was formerly known as Cadila Healthcare Limited.
Buy Back Offer Deal:
| Buyback Type: | Tender Offer |
| Buyback Record Date: | Feb 23 2024 |
| Buyback Opening Date: | Feb 29 2024 |
| Buyback Closing Date: | Mar 07 2024 |
| Buyback Offer Amount: | ₹ 600 Cr. |
| Date of Board Meeting approving the proposal: | Feb 09 2024 |
| Date of Public Announcement: | Feb 09 2024 |
| Buyback Offer Size: | 0.59% |
| Buyback Number of Shares: | 59,70,149 |
| Price Type: | Tender Offer |
| FV: | 1 |
| Buyback Price: | ₹ 1005 Per Equity Share |
Details of Buyback:
The proposal to buyback not exceeding 59,70,149 (Fifty Nine Lakhs Seventy Thousand One Hundred Forty Nine) equity shares of the Company (representing 0.59% of the total number of equity shares in the paid-up share capital of the Company) at a price of Rs. 1,005/- (Rupees One Thousand Five only) per equity share payable in cash for an aggregate consideration not exceeding Rs. 600,00,00,000/- (Rupees Six Hundred Crores only)
Salient financial parameters:
| Particulars (In Cr) | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 |
| Sales + | 13,166 | 14,253 | 14,404 | 15,110 | 17,237 |
| Expenses + | 10,174 | 11,455 | 11,013 | 11,768 | 13,378 |
| Operating Profit | 2,991 | 2,798 | 3,391 | 3,342 | 3,860 |
| OPM % | 23% | 20% | 24% | 22% | 22% |
| Other Income + | 183 | -264 | -231 | 2,581 | -422 |
| Interest | 194 | 342 | 159 | 127 | 130 |
| Depreciation | 599 | 696 | 670 | 713 | 723 |
| Profit before tax | 2,382 | 1,495 | 2,331 | 5,084 | 2,585 |
| Tax % | 22% | 21% | 8% | 10% | 23% |
| Net Profit + | 1,899 | 1,204 | 2,185 | 4,618 | 2,092 |
| EPS in Rs | 18.06 | 11.49 | 20.84 | 43.83 | 19.37 |
|
Dividend Payout %
|
19% | 30% | 17% | 6% | 31% |
How to Participate in buyback?
1. Firstly, to be eligible for the buyback the investor should have shares of Orbit Exports Limited in Demat or physical form as on the record date [23/02/2024].
2. Once you have shares in Demat, you can participate in the buyback process which is opening from [To be updated] by selling your shares through your broker on NSE or BSE.
3. Then on [To be updated], 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 199 Shares at CPM of Rs. 805 (2,00,000/1005)
| Acceptance Ratio | 33% | 50% | 75% | 100% |
| Amount Invested in Buyback | 160195 | 160195 | 160195 | 160195 |
| No. of Shares Buyback | 65 | 99 | 149 | 199 |
| Buyback Profit | 13000 | 19800 | 29800 | 39800 |
| Profit% | 8.12% | 12.36% | 18.60% | 24.84% |
38 Comments
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Zydus Lifesciences Buyback : 95 Shares got Accepted Out of 200 Shares👍
Retail Acceptance Ratio remained at 47.50%, Very Good Indeed as Entitlement was just 9%
98 out of 206 shares accepted
Dear Vinod, wherefrom it can be checked, can you advise the link.
In your trade book it May be .
Icicidirect is having in trade book
35 out of 75
6th was the last date but 7th was written here due to which I forgot to order some shares
Please don’t worry,it is likely to cross buyback price soon. I won’t be surprised if AR is 100 percent as it is.
You r lucky it crossed 1015
ZYDUS LIFESCIENCES – Retail AR Expected to be 50% (Initial Expectation was 20%)
BAJAJ AUTO – 75,159 Bids Received on Day 1, Total Expected Bids 5,50,000 Approx
Zydus and Kaveri Seeds Closed Today while BAJAJ AUTO Buyback has opened Today
SOURCE GK
What would be the AR in retail?
I think it will be very high considering the present share price of 946. If price rises more, the acceptance ratio will be very high.
entitlement ratio- 06 out of 67 shares i.e. around 9% which seems pretty good considering Buyback size.
I did
I didn’t buy on result day at 780 price thinking small size but now regretting deeply , I should have bought.
It already run to 900 and even after buyback record date share is standing strong as it is.
Missed the golden opportunity.
how does the zydus buy back look from er and ar perspective
not much activity in the group
Hi,
This buyback has any chance to render 1 share acceptance buyback.
Yes
Acceptance ratio theoretically for retail is about 27 percent.
Practically need to see how it goes
Excepted ER ?
and Expected AR?
Buyback Size:- 59,70,149 no of Shares
Buyback Price:- 1005
Record Date:- 23rd Feb
Reserved for retail:- 895522 no of Share
At this current Price i.e. 804 and size of buyback it does not look like attractive. Hence AR may be increase as compare to previous buyback of Zydus.
If the size is only.59 percent,even tendered single share may not get accepted. So no participation.
Expected ER?
@ TRINITY
I have forecasted Minimum EER for following buy backs.
Till now, actual ER has been more than forecasted Minimum ER in all 3 scripts, where offer letter is released
(1) SIS – Correct
(2) Elegant – Not Posted
(3) Dhampur – Correct
(4) Chambal – Correct
(5) Garware – Not posted (didn’t get time)
(6) Bajaj – awaited
(7) Kaveri – awaited
(8) Orbit – awaited
(9) Zydus – awaited
(10) Sherwani – awaited
U might be confused with my Forecasted AR
Yes,
I was wrong in forecasting AR in
(1) SIS
(2) Elegant (Big HNI selling distorted entire calculation)
I rechecked my all posts & then have posted this message
I had missed SIS, but looking at the post below, actual ER was lower for both Dhampur and Chambal. The other two are not out yet:
“Expected Minimum Entitlement Ratio for Small Shareholders (below Rs 2 lakhs):
Dhampur Sugar Jan 2024: 2.25 %
Kaveri Seeds Jan 2024: 30.04 %
Chambal Fertilisers Jan 2024: 11.22 %
Bajaj Auto Jan 2024 : 15 % “
And for Elegant, I assumed you must have done some calculation to get a precise 39.23%
“My presumption to participate in this buy back were:
Entry price: below Rs 340
EER: 39.23
Conservative AR: 60
Left over shares to be sold : any price above Rs 300
Least possible Profit with above criteria: Rs 5720 against investment of Rs 1,75 lacs”
@ TRINITY
Dhampur: Difference of Only 0.17%
Chambal: Difference of 4.07% (big difference- Agreed)
(1) In Chambal, as on 31-3-23, there were less than 2.21 crore shares (small share holder category). In last 10 months, 1.05 crore shares were added to make total 3.26 crore shares (small share holder category), which became known only when company released letter of Offer.
(2) Nobody has access to exact share holding pattern data (prior to Letter of offer), which one requires to estimate exact ER.
If you or any other member have suggestions to improve EER model, then let me know, I will definitely analyse that way also.
My Twitter id is : @aankit32
(3) From Zydus & Shervani, I have started putting EER (based on data of 31-3-2-23). I hope that will help our community to make informed decisions.
(4) Forecasting AR in scientific manner is very tough, as it requires ‘Guess work’ in 4 different variables. I know, it is effort in vain!
(5) I am also waititng to know difference between Actual ER i& EER in remaining scripts so that certain improvements can be made.
@ Aankit ji, the % difference between 2.25% and 2.08% is (2.08%-2.25%)/2.25% or 7.55%. That is still pretty good, but it has the same accuracy as a 22.5% prediction vs a 20.8% actual. If everything else was unchanged and the buyback size was 10x, I believe your model would have calculated 22.5% ER and the actual ER would have been 20.8%.
1% vs 2% is a bigger miss than 21% vs 40%.
As for modelling the ER in advance, I know there are too many unknowns and I can’t predict it with any degree of accuracy. From my perspective, it is not a very useful exercise. For me total expected return is more important . I hold a diversified portfolio of stocks and many times shares I already own have a buyback programme. Sometimes , pos
* Sometimes post buyback date selloffs actually offer good opportunities to buy, like the recent selloff in Chambal during the tendering period where I bought up shares that seemed cheap.
As more and more people get involved in buyback arbitrage , the expected return from the simple strategy of buying just before the record date and selling on the day shares are returned is getting smaller and can be negative in some cases.
ZYDUS Lifesciences Buy Back July 2022 (Short Summary)
Size: 1.13 % of Equity
Offer Value: Rs 700 crores
Price on record date: 365
Max Shares (for Small Share Holders Category) : 547 shares
Buy Back Price: 650
Actural ER: 5.16 % (26 shares out of 503)
Actual AR was 12%
Zydus Lifesciences Buy Back Feb 2024:
Expected Minimum ER (based on data of 31-03-2023) : 8.60 %
Expected Offer in Rupee Terms: more than 900 crore
Expected Buy back price: Around Rs 1000
Thanks for information
Thank you very much.
Very good buyback last one. At that time market price 360-375. BB price 650. Good premium. Lets see 2024 BB.
Yes, premium was high, but AR was quite low at 12%.
At 900 crores and 1000/share buyback price, the buyback size will be less than 1%. I don’t see how the ER for small shareholders can be 8% in that scenario.
@ TRINITY
No of small share holders (as on 31st March 2023) is less than that of last time, hence EER will be more than Actual ER of 2022
Sure, it will increase or decrease depending on Actual offer size & BB price
Many like me who participated in the last buyback would have sold their shares before March 31 and will buy again before the record date for this buyback. What matters is the shareholding pattern on the record date. Based on the buyback size and price you have suggested, I see very little possibility of ER exceeding 8.6%.
@TRINITY
I have posted EER,
Agreed that Actual ER will depend on many factors like overall Market trend, BB Price, Offer size, No of IPOs around record date, Difference in prevailing price & BB price etc
EER will be one of the basic criteria, while taking entry in any script for BBA.
Aankit ji, I am not sure how you compute EER, but, looking at the numbers you posted for other recent buybacks, unless I am mistaken, in all of them actual ER turned out to be lower than expected minimum ER you had posted. So, there seems to be a systematic upward bias in the model you are using for the calculations.