In this article, we will discuss the Eris Lifesciences Limited Buyback offer, buyback price, Eris Lifesciences buyback size, record date, company financial, buyback necessity and its impact on the company.
Eris Lifesciences Buyback Details
|Buyback Type||Tender Offer|
|Opening Date||January 1, 2020|
|Closing Date||January 14, 2020|
|Buyback Offer Amount||Rs.1,000 Million|
|Buyback No. of Shares||1,739,130|
|Date of Buyback Approval||July 3, 2019|
|Date of Public Announcement||July 5, 2019|
|Buy Back Price||Rs.575/-|
|Buy Back Premium||13.01%|
Eris Lifesciences Buyback Opening and Closing Date
The starting date is January 1, 2020 and closing dates of this buyback is January 14, 2020.
Eris Lifesciences Buyback Cash Offer
The Cash Offer to Buy-back up to 1,739,130 fully paid-up equity shares of the Company of face value of Rs.1 each.
Eris Lifesciences Buyback Record Date
The decided record date is Monday, July 15, 2019.
Eris Lifesciences Buyback Price
At a price of Rs.575/- (Rupees Five Seventy Five Only) per Equity Share.
Eris Lifesciences Buyback Size
The Buyback is for an aggregate amount not exceeding Rs.1,000 Million (Rupees One Thousand Million only)
Eris Lifesciences Buyback Acceptance Ratio
Find profit & profit percentage based on various acceptance rate, The profit is calculated based on 1000 shares.
|Acceptance Ratio||Total Shares Accepted||Buyback Price||Buyback Amount||Profit||Profit%|
Profit is calculated from Dec 26, 2019 share price i.e. Rs.460 per share of Eris Lifesciences Limited.
According to the above table, if a shareowner applies for 1000 shares of Eris Lifesciences Limited & gets 20% acceptance from the company, the owner of this 1000 shares will sell 200 shares @ Rs.575 per share & receive Rs.23000 as profit amount & 5.00 % 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.575 & receive a profit of Rs.69000 @ 15.00% profit percentage.
Eris Lifesciences Limited Buyback Overview
The Company was incorporated as “Eris Lifescience Private Limited” on January 25, 2007, as a private limited company under the Companies Act 1956, at Ahmedabad, with a certificate of incorporation granted by the Registrar of Companies, Gujarat, Dadra and Nagar Haveli.
A fresh certificate of incorporation consequent to the change in their Company’s name to “Eris Lifesciences Private Limited” was issued by the Registrar of Companies, Gujarat, Dadra and Nagar Haveli on February 9, 2007.
Further, pursuant to the conversion of their Company to a public limited company, their Company’s name changed to “Eris Lifesciences Limited” and the Registrar of Companies, Ahmedabad (the “RoC”) issued a fresh certificate of incorporation on February 2, 2017.
The Company is engaged in the business of manufacturing, marketing and distributing branded formulations in the Indian market. It has presence in high growth chronic and acute therapeutic areas that require high intervention of specialists and super specialists.
The total authorised share capital of the Company is Rs.300 Million consisting of 300,000,000 Equity Shares of Re.1/- each. As on date the subscribed, issued and paid up share capital of the Company consisted of 137,519,783 Equity Shares of Re.1/- each aggregating Rs.137,519,783/-.
Company Finances – Eris Lifesciences Limited
The salient features of the financial information of the Company for last three financial years as extracted from the financial statements is provided below:
(Rs in Millions)
|For the year|
|Depreciation and Amortization|
|Profit/(Loss) before Tax||3,173.58||3,122.29||2,703.87|
|Provision for Tax|
(including Deferred Tax)
|Profit/(Loss) after Tax||2,911.47||2,949.78||2,466.07|
|Equity share capital||137.52||137.50||137.50|
|Debt (excluding working capital)||1,764.61||3,771.28||77.60|
Eris Lifesciences Buyback Dates
|Date of the Board meeting held to approve the proposal for Buy-back of Equity Shares||Wednesday, July 3, 2019|
|Date of publication of Public Announcement for the Buy-back||Friday, July 5, 2019|
|Record Date for determining the Buy-back Entitlement and the Eligible Shareholders||Monday, July 15, 2019|
|Buy-back opens on / Buy-back Opening Date||Wednesday, January 1, 2020|
|Buy-back closes on / Buy-back Closing Date||Tuesday, January 14, 2020|
|Last date of verification by Registrar to Buy-back||Wednesday, January 22, 2020|
|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-back||Wednesday, January 22, 2020|
|*Last date of settlement of bids on the Stock Exchange||Thursday, January 23, 2020|
|Last date of return of unaccepted demat shares by Stock Exchange to Seller Member / Broker||Thursday, January 23, 2020|
|Last date of extinguishment of Equity Shares bought back||January 30, 2020, Thursday|
Necessity of Eris Lifesciences Buyback
The Company’s management strives to increase Shareholders’ value and the Buy-back would result in, amongst other things:
- The Buyback will improve the Earnings Per Share (EPS), Return on Capital Employed (ROCE) and Return on Equity (ROE);
- Buyback will help in achieving an optimal capital structure;
- The Buyback, which is being implemented through the tender offer route as prescribed under the SEBI Buyback Regulations, would involve allocation of number of shares as per the entitlement of the shareholders or 15% of the number of Equity Shares to be bought back whichever is higher, 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 SEBI Buyback Regulations;
- Buyback gives an option to the equity shareholders to either (i) choose to participate and get cash in lieu of Equity Shares to be accepted under the Buyback or (ii) choose to not participate and enjoy a resultant increase in their percentage shareholding, post Buyback, without additional investment.
Impact of Eris Lifesciences Buyback on the Company
They 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.
In the event that there is 100% acceptance of the Equity Shares tendered in the Buyback from Shareholders on a proportionate basis, the funds deployed by the Company towards the Buyback would be Rs. 1,000 Million (Rupees One Thousand Million only). This shall impact the investment income earned by the Company, on account of reduced amount of funds available for investments.
The Buyback is not expected to impact growth opportunities for the Company.
The Buyback will not result in a change in control or otherwise affect the existing management structure of the Company.
Salient financial parameters consequent to the Buyback based on the audited standalone and consolidated financial
statements for the half year ended on March 31, 2019, are as under:
|Parameters|| Consolidated Financial|
|Pre Buyback||Post Buyback||Pre Buyback||Post Buyback|
|Net Worth (Rs in Million)||11,688.29||10,688.29||11,560.07||10,560.07|
|Return on Net Worth %||24.91%||27.24%||24.69%||27.02%|
|Earnings Per Equity Share (EPS)|
(Basic) (in Rs)
|Book Value per share (in Rs)||84.99||78.72||84.06||77.77|
|Price Earnings (PE) Multiple||30.49||30.11||31.08||30.68|
|Debt/ Equity ratio||0.15||0.17||0.15||0.17|
Basis of Calculating Eris Lifesciences Buyback Price
The Buyback Price has been arrived at after considering various factors including, but not limited to the trends in the market prices of the Equity Shares on the Stock Exchanges where the Equity Shares are listed, the net worth of the Company, price earnings ratio, impact on other financial parameters and the possible impact of Buyback on the earnings per Equity Share.
More on Eris Lifesciences Buyback Price Calculation
The Buy-back Price represents
- Premium of 12.24% and 13.01% over the closing market price of the Equity Shares on the BSE and on the NSE respectively, as on June 24, 2019, being the date on which the Company intimated the Stock Exchanges of the date of the meeting of the Board wherein proposal of the Buyback was to be considered.
Source of Funds for the Buyback
Assuming full acceptance, the funds that would be deployed by the Company for the purposes of the Buyback, would be Rs. 1,000 Million (Rupees One Thousand Million only) excluding any expense incurred or to be incurred for the Buyback like filing fees payable to the Securities and Exchange Board of India, brokerage, applicable taxes such as securities transaction taxes, goods and services tax, stamp duty, advisors’ fees, public announcement publication expenses, printing and dispatch expenses and other incidental and related expenses.
The funds for the Buyback will be sourced from internal accruals. The Company has confirmed that funds for Buyback will be available from cash balances and/or liquidation of financial instruments and/or other sources available with the Company as permitted by the Buyback Regulations.
The Company shall transfer from its free reserves a sum equal to the nominal value of the Equity Shares bought back through the Buyback to the Capital Redemption Reserve Account and details of such transfer shall be disclosed in its subsequent audited financial statement.
The funds borrowed, if any, from banks and financial institutions will not be used for the Buyback.
Eris Lifesciences – Manager to the Buyback
|Axis Capital Limited|
1st Floor, Axis House, C-2 Wadia International Centre,
P.B. Marg, Worli, Mumbai – 400025
Tel: +91 22 4325 2183 ; Fax: + 91 22 4325 3000
Contact Person : Mr. Sagar Jatakiya
SEBI Registration: INM000012029
Validity Period: : Perpetual
Eris Lifesciences – Registrar to the Buyback
|Link Intime India Private Limited|
C- 101, 1st Floor, 247 Park, L. B. S. Marg, Vikhroli (West),
Mumbai – 400 083
Tel: +91 22 4918 6200; Fax: +91 22 4918 6195
Contact Person: Mr. Sumeet Deshpande
SEBI Registration: INR000004058
Validity Period : Permanent Registration
Eris Lifesciences Limited Contact Details
|Company Contact Details|
|Eris Lifesciences Limited|
Registered and Corporate Office: 8th Floor, Commerce House- IV, Prahladnagar, 100 Feet Road, Ahmedabad-380015, Gujarat,
Tel.: +91 79 3045 1111; Fax: +91 79 3017 9404
E-mail: email@example.com; Website: www.eris.co.in
Contact Person: Mr. Milind Talegaonkar, Company Secretary and Compliance Officer
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