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%

28 Comments

    entitlement ratio- 06 out of 67 shares i.e. around 9% which seems pretty good considering Buyback size.

      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.

    Acceptance ratio theoretically for retail is about 27 percent.
    Practically need to see how it goes

    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.

    @ 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

      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.

      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.

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