Kaveri Seeds Buyback Review, Offer Details, Price, Dates, Size & more

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

Kaveri Seeds Buyback Details

Buyback TypeTender Offer
Opening DateTuesday, December 31, 2019
Closing DateMonday, January 13, 2020
Buyback Offer AmountRs.1,960,000,000
Buyback No. of Shares28,00,000
Face ValueRs.2
Date of Buyback ApprovalTuesday, September 24, 2019
Date of Public AnnouncementTuesday, November 06, 2019
Buy Back PriceRs.700/-
Buy Back Premium33.42 %
Date of Board MeetingTuesday, September 24, 2019

Kaveri Seeds Buyback Opening and Closing Date

The starting and closing date of this buyback is from December 31, 2019 to January 13, 2020.

Kaveri Seeds Buyback Cash Offer

Cash Offer to Buy-back up to 28,00,000 fully paid-up equity shares of the Company of face value of Rs.2 each, representing 4.44% of the total number of equity shares.

Kaveri Seeds Buyback Record Date

The decided record date is Nov 22, 2019.

Kaveri Seeds Buyback Price

At a price of Rs.700/- per Equity Share.

Kaveri Seeds Buyback Size

At a buyback price of Rs.700/- payable in cash for an aggregate maximum amount of Rs.1,960,000,000

Kaveri Seeds Buyback Acceptance Query

You can check for Buyback Acceptance query here. Just click on the given link and it will redirect you to buyback acceptance query page.


Kaveri Seeds 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%200700140000370007.18%
40%4007002800007400014.37%
60%60070042000011100021.55%
80%80070056000014800028.74%
100%100070070000018500035.92%

Profit is calculated from Dec 27, 2019 share price i.e. Rs.515 per share of Kaveri Seeds Company Limited.

According to the above table, if a shareowner applies for 1000 shares of Kaveri Seeds Company limited & gets 20% acceptance from the company and the owner with 1000 shares will sell 200 shares @ Rs.515 per share & receive Rs.37000 as profit amount & 7.18% 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.515 & receive a profit of Rs.111000 @ 21.55% profit percentage.


Kaveri Seeds Buyback Overview

Kaveri Seeds BuybackThe Company was incorporated as “Kaveri Seed Company Private Limited” under the Companies Act, 1956 with the Registration No. 6728 of 1986-87 and is promoted by Mr. Gundavaram Venkata Bhaskar Rao, Mrs. Gundavaram Vanaja Devi and Mr. Rangineni Venu Manohar Rao.

The Company is mainly into the business of production, processing and marketing of high quality hybrid seeds for different crops like corn, sunflower, cotton, paddy, grain sorghum, etc. and have recently forayed into micronutrients and bio-products. The company produces non-hybrid seeds, primarily for paddy.

The Company is a leading provider of crop solutions to the farmer by supplying high yielding hybrid seeds and crop management namely micronutrients, bio-products etc. This Company is engaged in research and development in the areas of superior breeding programs and biotechnology tools that will enable them to develop highly effective and differentiated hybrid seeds, micronutrients and bio-products.

The Company has achieved a consolidated revenue of Rs.80,941.81 Lakhs for the FY ended 2019 as per the financial statements prepared in accordance with Indian Accounting Standards


Company Finances – Kaveri Seeds Company Limited

The salient financial information of the Company, as extracted from the standalone audited results for the last three financial years and limited review financial information for the six months period ended 30th September, 2019 based in IND AS are given below:

[In Rs. Lakhs]

ParticularsFor the six months period ended Sep-19
(Unaudited)
12 Months period ended March 31
(Audited)
201920182017
Total Income74,021.8981,185.6779,609.7670,424.00
Total Expenses (excluding finance cost, depreciation)48,832.9056,342.4555,439.6553,201.43
Interest5.0912.5239.9612.27
Depreciation expenses1,170.932,117.652,335.192,849.21
Profit before tax24,012.9722,713.0521,794.968,437.29
Provision for tax
(including Deferred Tax)
426.361,240.19760.75590.17
Profit /(Loss) after tax23,586.6121,472.8621,034.217,847.12
Equity Share Capital1,262.581,262.581,321.841,381.10
Reserve and SurplusNA1,00,033.371,00,801.291,01,020.30
Net worthNA1,01,295.951,02,123.131,02,401.40
Total Debt (Excluding working capital loans)179.55187.06187.82163.86

Kaveri Seeds Buyback Dates

Date of Board Meeting approving the BuybackSeptember 24, 2019
Date of publication of Public Announcement for BuybackNovember 07, 2019
Record Date for determining the Buyback Entitlement and the names of Eligible ShareholdersNovember 22, 2019
Buyback Opening dateDecember 31, 2019
Buyback Closing dateJanuary 13, 2020
Last Date of verification of Tender Forms by the RegistrarJanuary 17, 2020
Last date of intimation regarding acceptance / non-acceptance of Tendered Equity Shares to the BSE Limited by the RegistrarJanuary 20, 2020
*Last date of Settlement of Bids on the BSE LimitedJanuary 21, 2020
Last date of return of unaccepted Equity Shares by BSE LimitedJanuary 21, 2020
*Last date of Extinguishment of Equity SharesJanuary 28, 2020

Kaveri Seeds Buyback Details of Public Announcement

As per Regulation 7(i) of the Buyback Regulations, 2018, the Company has made a Public Announcement dated November 06, 2019 for the Buyback of Equity Shares published in the following newspapers on November 07th, 2019, which is within two working days from the date of declaration of results of the postal ballot for special resolution on November 5th, 2019.

PublicationLanguageEdition
Business StandardEnglishAll editions
Business StandardHindiAll editions
Nava TelanganaTeluguHyderabad

Necessity of Kaveri Seeds Buyback

Buyback will be beneficial to the Company and its Equity Shareholders, inter-alia, for the following reasons:

  1. Buyback will help the Company to return surplus cash to its members, holding equity shares and tendering under the Buyback, broadly in proportion to their shareholding, thereby, enhancing the overall return to the members;
  2. Kaveri Seeds Buyback, which is being implemented through the Tender Offer route as prescribed under the Buyback Regulations, would involve allocation of higher of number of shares as per their entitlement or 15% of the number of shares to be bought back, reserved for the small shareholders. Company believes that this reservation for small shareholders would benefit a large number of public shareholders, who would get classified as “small shareholder”
  3. The Buyback may help in improving return on equity, by reduction in the equity base, thereby leading to long term increase in shareholders’ value;
  4. This 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 Buyback offer or they may choose not to participate and enjoy a resultant increase in their percentage shareholding, post the Buyback offer, without additional investment.
  5. Optimizes the capital structure.

Impact of Kaveri Seeds Buyback on the Company

The Company believes the Buyback is not likely to cause any material impact on the profitability or 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.

They believe the Buyback will not in any manner impair the ability of the Company to pursue growth opportunities or meet its cash requirements for business operations.

The Buyback is expected to contribute to the overall enhancement of shareholder value, and result in an increase in the return on equity of the Company.

The Buyback will not result in a change in control or otherwise affect the existing management structure of the Company.

The debt-equity ratio after the completion of the Buyback will be within the permissible limit of 2:1 prescribed by the Companies Act, even if the response to the Buyback is to the extent of 100% (full acceptance)

Salient financial parameters consequent to the Buyback based on the latest audited results as on March 31, 2019
are as under:

Parameters 

StandaloneConsolidated
Pre Buy-back
Post Buy-backPre Buy-back
Post Buy-back
Net worth (Rs in Lakhs)101,295.9581,695.95100,625.1581,025.15
Return on Net worth (%)21.2026.2821.6126.83
Earnings Per Share (Rs)33.3035.5933.7236.04
Book Value per Share (Rs)160.46135.42159.40134.31
P/E as per the latest audited standalone financial statements16.2615.2216.0615.03
Total Debt / Equity Ratio0.0020.0030.0070.009

Basis of Calculating Kaveri Seeds Buyback Price

The Buyback Price per Equity Share has been arrived at after considering various factors such as the average closing prices of the Equity Shares of the Company on BSE and NSE, the networth of the Company and the impact of the Buyback on the key financial ratios of the Company.

More on Kaveri Seeds Buyback Price Calculation

The closing market price of the Equity Shares as on the date of intimation of the date of the Board meeting for considering the Buyback, September 16, 2019 was Rs.528.55 and Rs.524.95 on BSE and NSE respectively, and the Buyback Offer Price of Rs.700/- (Rupees Seven Hundred Only) per equity share represents a premium of 32.43 % and 33.42 % over the closing price of the Equity Shares on BSE and NSE, respectively.

The Buyback Price per Equity Share represents a premium of 53.24% and 50.72% over the volume weighted average market prices of the Company’s Equity Shares on BSE and NSE respectively for 3 months preceding the date of intimation to BSE and NSE for the Board Meeting to consider the proposal of the Buyback, being September 16th, 2019 and 44.34% and 41.71% over the average closing prices of the Company’s equity shares on BSE and NSE respectively for 2 weeks preceding the date of intimation to BSE and NSE for the Board Meeting to consider the proposal of the Buyback


Source of Funds for the Buyback

Assuming full acceptance, the funds that would be utilized by the Company for the purpose of the Buyback would be Rs.1,960,000,000 (Rupees One Hundred and Ninety Six Crores only).

The funds for the Buyback will be sourced from current balances of cash and cash equivalents and/or internal accruals of the Company and/or liquidation of financial instruments held by the Company.

The Company shall transfer from its free reserve / securities premium account a sum equal to the nominal value of the equity shares 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 Company does not intend to raise additional debt for the explicit purposes of the Buyback. Thus, funds from banks and financial institutions will not be used for the Buyback.


Kaveri Seeds Company Limited – Manager to the Buyback

Karvy Investor Services Limited
Plot No.31, 8th Floor, Karvy Millennium,
Nanakramguda, Financial District, Gachibowli
Hyderabad – 500 032, Telangana, India.
Tel.: +91 40-23428774/23312454; Fax: +91 40-23374714/23311968
Email: cmg@karvy.com; Website: www.karvyinvestmentbanking.com
Contact Person: M.P.Naidu /P.Pranavi
SEBI Registration No.: INM000008365

Kaveri Seeds Company Limited – Registrar to the Buyback

Bigshare Services Private Limited
1st Floor, Bharat Tin Works Building, Opp Vasant Oasis,
Makwana Road, Marol, Andheri (E), Mumbai – 400059
Tel: +91-22- 6263 8200 Fax: +91-22- 6263 8280
Email: buybackoffer@bigshareonline.com
Website: www.bigshareonline.com
Contact person: Mr. Arvind Tandel SEBI
Registration Number: INR000001385

Kaveri Seeds Company Limited Contact Details

Company Contact Details
Kaveri Seeds Company Limited
CIN: L01120TG1986PLC006728
Registered Office: 513-B, 5th Floor, Minerva Complex, SD Road, Secunderabad – 500003,
Tel.: +91- 40-27842398; Fax: +91- 40-27811237
E-mail: cs@kaveriseeds.in; Website: www.kaveriseeds.in
Contact Person: Mr. K V Chalapathi Reddy, CFO and Compliance Officer

 


Kaveri Seeds Buyback News

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

News 2 – Kaveri Seeds Company Ltd – Public Announcement


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