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Aarti Drugs Limited Buyback – Review, Offer Details, Price, Dates & more

In this article, we will discuss the Aarti Drugs Limited Buyback offer, buyback price, buyback size, record date, company financial, buyback necessity and its impact on the company.

Aarti Drugs Limited Buyback Details

Buyback TypeTender Offer
Buyback Opening DateMay 03, 2019
Buyback Closing DateMay 16, 2019
Buyback Offer AmountRs. 25,38,90,000/-
Buyback No. of Shares2,82,100
Face ValueRs. 10/-
Date of Buyback Approval March 15, 2019
Date of Public AnnouncementMarch 18, 2019
Buy Back Price Rs. 900/-
Buy Back Premium50.17%

Aarti Drugs Buyback Opening and Closing Date

The starting and closing dates of this buyback are from May 03, 2019, to May 16, 2019.

Aarti Drugs Buyback Cash Offer

The Cash Offer to Buy-back up to 2,82,100 (Two Lakh Eighty Two Thousand One Hundred) fully paid-up equity shares of the Company of face value of Rs. 10 each.

Aarti Drugs Buyback Record Date

The decided record date is Friday, March 29, 2019.

Aarti Drugs Buyback Price

At a price of Rs. 900/- (Rupees Nine Hundred Only) per Equity Share.

Aarti Drugs Buyback Size

The Buyback is for an aggregate amount not exceeding Rs. 25,38,90,000/- (Rupees Twenty Five Crores Thirty-Eight Lakhs Ninety Thousand only)


Aarti Drugs Buyback Acceptance Ratio

Find profit & profit percentage based on various acceptance rate, The profit is calculated based on 1000 shares.

Acceptance RatioTotal Shares AcceptedBuyback PriceBuyback AmountProfitProfit%
20%
40%
60%
80%
100%

Profit is calculated from 12th May 2019 share price i.e. Rs.54.15 per share of Aarti Drugs Limited.

According to the above table, if a share owner applies for 1000 shares of Aarti Drugs Limited & gets 20% acceptance from the company, the owner of this 1000 shares will sell 200 shares @ Rs.56 per share & receive Rs.370 as profit amount & 0.68% profit percentage on selling these 200 shares back to the company.

Similarly, if the owner gets 60% acceptance of share from the company, the owner will sell 600 shares @ Rs.56 & receive a profit of Rs.1,110 @ 2.05% profit percentage.


Aarti Drugs Limited Buyback Overview

AARTI DRUGS LIMITED buybackAarti Drugs Limited is a manufacturer of bulk drugs in some of the popular therapeutic groups as also specialty chemicals. It exports to various countries worldwide. The Company has a comprehensive product portfolio with a presence in anti-biotic, anti-protozoal, anti-inflammatory, anti-fungal, anti-diabetic, cardio-protectant, vitamins, antiarthritis, sedatives therapeutic groups.

The Company has developed various products in Lifesaving and Lifestyle related diseases. Its core competence lies in the development of cost effective synthesis routes for bulk drugs and intermediates. The Company has transformed into eleven multi-location, some of them are GMP compliant with state – of the art facilities.

With nine manufacturing locations located at Tarapur (Maharashtra) and Two manufacturing locations located at Sarigam (Gujarat), the Company is capable of making over 40 products comprising of bulk actives, key intermediates and specialty chemicals.

The Company has also got approvals from various authorities such as WHO-GMP, ACCREDITATION from JAPAN, IDL China, ANVISA, TGA Australia, COFEPRIS and COS.


Company Finances – Aarti Drugs Limited

The salient financial information of the Company as extracted from the audited  consolidated financial statements for the half year ended September 30, 2018 and preceding three financial years being March 31, 2018, March 31, 2017 and March 31, 2016 are as under:

(Rs in Lakhs)

ParticularsFor the six months
ended on
September 30,
2018(3)
For the year
ended March 31,
2018(3)
For the year
ended March
31, 2017(3)
For the year
ended March 31,
2016(4)
AuditedAuditedAuditedAudited
Months6121212
Total Income(1)72,271.611,26,361.811,29,208.481,13,983.99
Total Expenses(2)62,209.391,06,409.071,10,118.9296,415.06
Finance Cost1,914.073,496.133,642.094,388.68
Depreciation and Amortization
expense
2,103.284,006.303,846.273,652.76
Profit/(Loss) before Tax6,044.8812,450.3211,601.209,527.49
Provision for Tax
(including Deferred Tax)
1,902.484,219.653,421.002655.00
Profit/(Loss) after Tax(5)4,142.408,230.678,180.206,872.49
Equity share capital2,358.212,358.212,385.712,421.71
Other Equity47,054.7643,184.5637,627.5033,318.08
Less: Other Comprehensive Income514.88514.88541.90
Net worth(6)48,898.0945,027.8939,471.3135,739.79
Debt (excluding working capital)(7)23,582.7224,061.0623,483.0422,499.38
Debt (including working capital)(8)55,566.6354,625.2747,949.4748,340.24

Aarti Drugs Limited Buyback Dates

Date of the Board meeting held to approve the proposal for Buy-back of Equity SharesFriday, March 15, 2019
Date of publication of Public Announcement for the Buy-backTuesday, March 19, 2019
Record Date for determining the Buy-back Entitlement and the Eligible ShareholdersFriday, March 29, 2019
Buy-back opens on / Buy-back Opening DateFriday, May 03, 2019
Buy-back closes on / Buy-back Closing DateThursday, May 16, 2019
Last date of verification by Registrar to Buy-backFriday, May 24, 2019
Last date of intimation to the Stock Exchange regarding acceptance or non-acceptance of tendered Equity Shares by the Registrar and Manager to the Buy-backFriday, May 24, 2019
Last date of settlement of bids on the Stock ExchangeMonday, May 27, 2019
Last date of return of unaccepted demat shares by Stock Exchange to Seller Member / BrokerMonday, May 27, 2019
Last date of extinguishment of Equity Shares bought backMonday, June 03, 2019


Necessity of Aarti Drugs Limited Buyback

This Buyback is being undertaken to return to the equity shareholders, in an expedient, effective and cost-efficient manner, surplus cash which is in excess of the Company’s ordinary capital requirements and current investment plans. The Buyback is being undertaken for the following reasons:

  • Aarti Buyback will help the Company to return surplus cash to its Shareholders holding Equity Shares broadly in proportion to their shareholding, thereby, enhancing the overall return to Shareholders;
  • The Buyback, which is being implemented through the Tender Offer route as prescribed under the Buyback Regulations, would involve allocating to the Small Shareholders the higher of number of shares entitled as per their holdings, or 15% of the number of shares to be bought back, reserved for the Small Shareholders. The Company believes that this reservation for Small Shareholders would benefit a large number of public shareholders, who would get classified as “Small Shareholder” as per Regulation 2(i)(n) of the Buyback Regulations;
  • This Buyback is expected to improve return on equity and earnings per share by reduction in the equity base, thereby leading to long term increase in Shareholders’ value; and
  • It gives an option to Shareholders holding equity shares of the Company, who can choose to participate and get cash in lieu of Equity Shares to be accepted under the Buyback offer or they may choose not to participate and enjoy a resultant increase in their percentage shareholding in the Company, post the Buyback offer, without additional investment.

Impact of Aarti Drugs Limited Buyback on the Company

We believe that the Buyback is not likely to cause any material impact on the profitability / earnings of the Company except to the extent of reduction in the amount available for investment, which the Company could have otherwise deployed towards generating investment income.

Assuming the response to the Buyback is 100% (full acceptance) from all the Eligible Sellers in proportion to their respective Buyback Entitlement, the aggregate shareholding of the Promoter and Persons in Control post the Buyback may increase to 62.33% from 62.26% or may decrease to 37.67% from 37.74% prior to Buyback i.e. as on Record Date March 29, 2019.

The debt-equity ratio immediately on completion of Buyback shall be in compliant with the permissible limit of 2:1 prescribed under the Act even if the response to the Buyback is 100% (full acceptance) from all the Eligible Sellers in proportion to their respective Buyback Entitlement.

Salient financial parameters consequent to the Buyback based on the audited standalone and consolidated financial
statements for the half year ended on September 30, 2018 are as under:

ParametersBased on Consolidated Financial
Statements
Based on Standalone Financial
Statements
Pre BuybackPost BuybackPre BuybackPost Buyback
Net Worth (Rs in Lakhs)48,898.0946,359.1946,559.9744,021.07
Profit/(Loss) for the period (Rs in
Lakhs)
4,142.404,142.404,041.904,041.90
Return on Net Worth %8.478.948.689.18
Earnings Per Equity Share (EPS)
(Basic) (in Rs)
17.5717.7817.1417.35
Book Value per share (in Rs)207.35198.97197.44188.93
Price Earnings (PE) Multiple31.2630.8932.0531.66
Debt/ Equity ratio1.141.201.121.18

Basis of Calculating Aarti Drugs Buyback Price

The Buyback Price of ₹ 900/- (Rupees Nine Hundred) per Equity Share has been arrived at after considering various factors including, but not limited to:

  • The volume weighted average market price of the Equity Shares on the NSE (the Stock Exchange where the maximum volume of trading in the Equity Shares is recorded) during 3 (three) months and 2 (two) weeks preceding the date of the intimation of the Board Meeting i.e. March 11, 2019,
  • The closing market price on the date of the intimation of the Board Meeting i.e. March 11, 2019 and
  • The impact on the net worth of the Company and possible impact of Buyback on earnings and return on net worth per Equity Share.

More on Aarti Drugs Buyback Price Calculation

The Buyback Price represents a premium of 50.17% over the volume weighted average market price of the Equity Shares on the NSE (the Stock Exchange where the maximum volume of trading in the Equity Shares is recorded) for 3 (three) months preceding the date of the intimation of the Board Meeting i.e. March 11, 2019 which was Rs 599.32 and 41.98% over the volume weighted average market price of the Equity Shares on the NSE for 2 (two) weeks preceding the date of the intimation of the Board Meeting i.e. March 11, 2019 which was Rs 633.87.

The closing market price of the Equity Shares as on the date of the intimation of the Board Meeting i.e. March 11, 2019, was Rs 666.65 on BSE and Rs 665.05 on NSE.


Source of Funds for the Buyback

The funds for the Buyback will be sourced from the cash and cash equivalents and/or accumulated internal accruals and no borrowings are made to discharge the Buy-Back obligations. However, if required, the Company may borrow funds in the ordinary course of its business.

The Company shall transfer from its free reserves a sum equal to the nominal value of the equity shares purchased through the Buyback to the Capital Redemption Reserve account and the details of such transfer shall be disclosed in its subsequent audited financial statement.


Aarti Drugs Limited – Manager to the Buyback

Inga Advisors Private Limited
1229, Hubtown Solaris, N.S. Phadke Marg,
Opp. Telli Galli, Andheri (East), Mumbai 400069
Tel. No.: 022 26816003, Fax : 022 26816020;
Contact Person: Kavita Shah;
Email: [email protected];
Website: www.ingaadvisors.com;
SEBI Registration No: INM000012573;
Validity Period : Permanent
CIN: U74140MH2007PTC168130

Aarti Drugs Limited – Registrar to the Buyback

Link Intime India Private Limited
C-101, 247 Park, L.B.S. Marg, Vikhroli (West)
Mumbai, Maharashtra – 400 083
Tel. No.: +91 22 4918 6200; Fax: +91 22 4918 6195;
Contact person: Sumeet Deshpande;
Email: [email protected]
Website: www.linkintime.co.in ;
SEBI Registration No: INR000004058;
Validity Period: Permanent
CIN: U67190MH1999PTC118368

Aarti Drugs Limited Contact Details

Company Contact Details
AARTI DRUGS LIMITED
Registered Office: Plot No. N – 198, M.I.D.C., Village – Pamtermbhi, Taluka & Dist. Palghar – 401 506, Maharashtra;
Corporate Office: Mahendra Industrial Estate, Ground Floor, Plot No. 109-D, Road No. 29, Sion (East), Mumbai – 400 022, Maharashtra;
Corporate Identity Number (CIN): L37060MH1984PLC055433;
Tel. No.: +91 22 2404 8199; Fax: +91 22 2407 3462; Email: [email protected]; Website: www.aartidrugs.co.in;
Contact Person: Adhish P. Patil, Chief Financial Officer and Compliance Officer

 


Aarti Drugs Limited Buyback News

News 1 – Buyback PDF / Letter of Offer [Download]


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