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Frontline Securities Buyback Review, Offer Details, Price, Dates, Size & more

In this article, we will discuss about Frontline Securities Limited Buyback offer, buyback price, buyback size, record date, company financial, buyback necessity and its impact on company.

Frontline Securities Limited Buyback Details

Buyback TypeTender Offer
Buyback Opening Date
Buyback Closing Date
Buyback Offer AmountRs. 7,56,01,080/-
Buyback No. of Shares 18,90,027
Face ValueRs. 5/-
Date of Buyback ApprovalMarch 26, 2019
Date of Public AnnouncementMay 10, 2019
Buy Back PriceRs. 40/-
Buy Back Premium4.31%
Date of Board MeetingMarch 26, 2019
Record  DateMay 24, 2019

Frontline Securities Buyback Opening and Closing Date

The starting and closing date of this buyback is NA.

Frontline Securities Buyback Cash Offer

The Cash Offer to Buy-back up to 18,90,027 fully paid-up equity shares of the Company of face value of Rs. 5 each, representing 24.99% of the total number of equity shares.

Frontline Securities Buyback Record Date

The decided record date is Friday, May 24, 2019.

Frontline Securities Buyback Price

At a price of Rs. 115 (Rupees One Hundred Fifteen Only) per Equity Share.

Frontline Securities Buyback Size

At a buyback price of Rs. 40/- payable in cash for an aggregate consideration not exceeding Rs. 7,56,01,080 (Rupees Seven Crores Fifty Six Lakhs One Thousand and Eighty only).


Frontline Securities 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%200
40%400
60%600
80%800
100%1000

Profit is calculated from 10th May 2019 share price i.e. Rs.40 per share of Frontline Securities Limited.

According to the above table, if a share owner applies for 1000 shares of Frontline Securities limited & gets 20% acceptance from the company and the owner with 1000 shares will sell 200 shares @ Rs.40 per share & receive Rs.600 as profit amount & 0.54% 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.40 & receive a profit of Rs.1800 @ 1.61% profit percentage.


Frontline Securities Limited Buyback Overview

The Company is registered with the Reserve Bank of India as Non-Deposit accepting Non-Banking Finance Company (Non Systematically Important) (RBI Regn. No. B.00089) and is also engaged in the business of providing financial services to help clients to plan and execute their investment needs based on their risk-return requirements.

The Company provides investment advisory services in areas such as Wealth Management, Mutual Fund Distribution, Corporate Advisory, Tax Planning, Mergers and Acquisitions, Life Insurance etc.


Company Finances – Frontline Securities Limited

The salient financial information of the Company as extracted from the Audited Financial Statements for the nine months period ended December 31, 2018 and the last three financial years ended March 31, 2018, March 31, 2017 and March 31, 2016 are as given below:

(Rs. In Lakhs)
December 31, 2018201820172016
Total income575.791,296.07560.01479.89
Profit before Interest Depreciation and Amortization489.901,194.20495.08403.14
Interest7.3211.340.010.06
Depreciation26.3120.933.424.11
Profit before tax456.271,161.93491.65398.97
Profit after tax (from continuing operations)347.57996.41449.97353.97
Equity Share Capital592.78592.78718.67718.67
Reserves and SurplusNA3,953.383,647.453,239.72
Net worthNA4,546.164,366.123,958.39
Basic Earnings per Share (in Rs.)NA111.51140.25165.59
Diluted Earnings per Share (in Rs.)2.9314.136.264.93
Book value per share (in Rs.)2.9314.136.264.93
Return on Net WorthNA76.6960.7555.08
Total Debt Equity ratioNA21.9210.318.94

Important Dates – Frontline Securities Limited

Date of the Board meeting held to approve the proposal for Buy-back of Equity SharesTuesday, March 26, 2019
Date of publication of Public Announcement for the Buy-backFriday, May 10, 2019
Record Date for determining the Buy-back Entitlement and the Eligible ShareholdersFriday, May 24, 2019
Buy-back opens on / Buy-back Opening Date
Buy-back closes on / Buy-back Closing Date
Last date of verification by Registrar to Buy-back
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
Last date of settlement of bids on the Stock Exchange
Last date of return of unaccepted demat shares by Stock Exchange to Seller Member / Broker
Last date of extinguishment of Equity Shares bought back

Details of Public Announcement

In accordance with the provisions of the Regulation 7 (i) of the SEBI Buyback Regulations, the Company has made a Public Announcement for the Buyback of Equity Shares which was published on May 10, 2019 in all editions of :

  • Business Standard, an English national daily newspaper; and
  • Business Standard, a Hindi national daily newspaper, both with wide circulation within two working days from the date of declaration of results of resolution by the shareholders through postal ballot i.e. May 09, 2019 for the Buyback.

Necessity of Buyback

The Company’s management strives to increase Shareholder’s value and the Buyback would result in, amongst other things:

  • The Buyback will result in reduction in the overall capital employed in the business, which will, in turn lead to higher earnings per share and enhanced return on equity and return on capital employed, return on net worth, return on assets, etc and long term increase in shareholders’ value;
  • The Buyback will help the Company to distribute surplus cash to its Members holding equity shares broadly in proportion to their shareholding, thereby, enhancing the overall return to Members;
  • The Buyback, which is being implemented through the Tender Offer route as prescribed under the SEBI Buyback Regulations, would involve allocation of 15% of the outlay to Small Shareholders. The Company believes that this reservation of 15% for Small Shareholders would benefit a large number of public shareholders, who would get classified as “Small Shareholder”; and
  • The Buyback gives an option to the Members holding equity shares of the Company, who can choose to participate and get cash in lieu of Equity Shares to be accepted under the Offer or they may choose to not participate and enjoy a resultant increase in their percentage shareholding, post the Offer, without additional investment.

Impact of Buyback on the Company

The Buyback is not likely to cause any material impact on the earnings of the Company except a reduction in the amount available for investment, which the Company could have otherwise deployed towards generating investment income. The Buyback will optimize returns to the shareholders and enhance overall shareholders value. The Buyback is not expected to impact growth opportunities for the Company.

The debt-equity ratio post the Buyback will be below the maximum allowable limit of 2:1 specified under the Act.

RatiosPre Buyback (based on the number of shares before split of face value)Post Buyback (based on the number of shares after split of face value)Post
Buyback
Net Worth (Rs. in lakhs)4,546.164,546.163,790.15
Return on Networth (%age)21.9221.9226.29
Earnings Per Share (in Rs.) :
Basic14.137.0710.00
Diluted14.147.0710.00
Book Value per Share (in Rs.)76.6938.3538.03
Price / Earnings multiple as per latest audited Financial Statements2.304.603.25
Total Debt / Equity Ratio0.0250.0250.029
Long term Debt / Equity Ratio0.0170.0170.021

Basis of Calculating Buyback Price

The Buyback Price of Rs. 40/- represents:

(a) a premium of approx. 23.08% over the closing price of the Equity Shares on BSE, as on Tuesday, March 19, 2019, being the trading day prior to the date on which the Company intimated BSE Limited of the date of the meeting of the Board of Directors, wherein the proposal 18 of the Buyback was considered;

(b) a premium of approx. 22.03% and 34.32% over the volume weighted average price of the Equity Shares on the BSE during the last three months and last two weeks preceding March 20, 2019, being the day on which Company intimated the Stock Exchange of the date of meeting of the Board of Directors wherein the proposal for Buyback was considered.

More on Frontline Securities Buyback Price Calculation

The closing market price of the Equity Shares as on March 19, 2019, being the working day immediately preceding the date on which Company intimated Stock exchanges of the date of meeting of the Board of Directors wherein the proposal for the Buyback was considered was Rs. 32.50 on BSE and the closing market price of the Equity Shares as on March 20, 2019.

Being the date of intimation of the date of Board Meeting wherein the proposal for the Buyback was considered was Rs. 33.50 on BSE.

The Buyback Price is at 4.31% premium over the Company’s book value per Equity Share of the Company, which as of March 31, 2018 was Rs. 38.35 per Equity Share.


Source of Funds for the Buyback

The Buyback shall be made out of the Free Reserves of the Company as at March 31, 2018 based on the Audited Financial Statements of the Company for the Financial Year ended March 31, 2018. The Company shall transfer a sum equal to the nominal value of the Equity Shares so bought back through the Buyback to the Capital Redemption Reserve Account and the details of such transfer shall be disclosed in its subsequent audited Balance Sheet.

The funds for the Buyback will be sourced from internal accruals of the Company. The Company does not intend to raise any debt for the explicit purposes of the Buyback. Thus, borrowed funds will not be used for the Buyback. However, if required, the Company may borrow funds in the ordinary course of its business.


Frontline Securities Limited – Manager to the Buyback

Sundae Capital Advisors Private Limited
611, Shahpuri Tirath Singh Tower
58, C – Block, Community Centre
Janak Puri, New Delhi – 110 058
Tel. No. +91 11 4914 9740
Email: [email protected]
Investor Grievance e-mail id: [email protected]
Website: www.sundaecapital.com
SEBI Regn. No.: INM000012494
Validity Period : Perpetual
Contact Person: NitiN Somani / Anchal Lohia

Frontline Securities Limited – Registrar to the Buyback

Link Intime India Private Limited
C-101, 1st Floor, 247 Park
L.B.S. Marg, Vikhroli (West),
Mumbai – 400 083, Maharashtra, India
Tel No.: +91 22 4918 6200
Fax No.: +91 22 4918 6195
Email id.: [email protected]
Website: www.linkintime.co.in
SEBI Regn. No.: INR000004058
Validity Period: Perpetual
Contact Person: Sumeet Deshpande

Frontline Securities Limited Contact Details

Company Contact Details
Frontline Securities Limited
(CIN: L65100DL1994PLC058837)
Registered Office: M-6, IInd Floor, M Block Market, Greater Kailash – II, New Delhi – 110 048
Tel: +91 11 2921 1228; Fax: +91 11 2921 3867
Corporate Office: B – 22, Sector – 4, Noida – 201 301
Tel: +91 120 253 4066 – 68; Fax: +91 120 253 4111
Website: www.fslindia.com, Email: [email protected]
Contact Person: Ms. Richa Arora, Whole Time Director and Company Secretary

 


Frontline Securities Limited Buyback News

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


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