Magna Electro Castings Buyback Review, Offer Details, Price, Dates, Size & more

In this article, they will discuss about Magna Electro Castings Limited Buyback offer, buyback price, buyback size, Magna Electro Castings Buyback record date, company financial, buyback necessity and its impact on company.

To track the real time share price of this Buyback, click on this link – https://top10stockbroker.com/share-price/magna-electro-castings-share-price/

Magna Electro Castings Limited Buyback Details

Buyback TypeTender Offer
Opening DateOctober 27,2020
Closing DateNovember 10, 2020
Buyback Offer AmountRs.7,00,00,000
Buyback No. of Shares4,00,000
Face ValueRs.10
Date of Buyback ApprovalSeptember 18, 2020
Date of Public AnnouncementSeptember 21, 2020
Buy Back PriceRs.175
Buy Back Premium45.65%
Date of Board MeetingSeptember 18, 2020

Magna Electro Castings Buyback Opening and Closing Date

The starting and closing date of this buyback is from October 27,2020 to November 10, 2020.

Magna Electro Castings Buyback Cash Offer

Cash Offer to Buy-back up to 4,00,000 fully paid-up equity shares of the Company of face value of Rs.10 each, representing 8.73% of the issued, subscribed and paid-up Equity Shares of the Company.

Magna Electro Castings Buyback Record Date

The decided record date is OCTOBER 1, 2020.

Magna Electro Castings Buyback Price

At a price of Rs.175 per Equity Share.

Magna Electro Castings Buyback Size

At a buyback price of Rs.175 payable in cash for an aggregate maximum amount of Rs.7,00,00,000.

Magna Electro Castings Limited 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.


Magna Electro Castings Limited 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%2001753500053103.58%
40%40017570000106207.15%
60%6001751050001593010.73%
80%8001751400002124014.31%
100%10001751750002655017.88%

Profit is calculated from Oct 20, 2020 share price i.e. Rs.148.45 per share of Magna Electro Castings Limited.

According to the above table, if a shareowner applies for 1000 shares of Magna Electro Castings limited & gets 20% acceptance from the company and the owner with 1000 shares will sell 200 shares @ Rs.175 per share & receive Rs.5310 as profit amount & 3.58% 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.175 & receive a profit of Rs.15930 @ 10.73% profit percentage.


Magna Electro Castings Limited Buyback Overview

Magna Electro Castings Buyback

The Company is in the business of manufacturing and supplying ferrous components in small and medium volumes to users worldwide. This Company specializes in the manufacture of ductile iron and gray iron casting in the weight range of 300 grams to a maximum of 2000 Kilograms.

The Company also adds value by heat treatment, surface treatments and machining so that the products are ready to assemble. This Company also produces fully machined components, utilizing its in-house CNC machine shop and other facilities as well.

The Company has experience in the supply of safety requirement components in the casting and fully machined forms. The components meet stringent requirements in terms of Radiographic Quality and Metallurgical Control.

This Company has also installed four Wind Energy Generators with a total capacity of 4 MW as part of the Green Initiative and generation of clean energy.


Company Finances – Magna Electro Castings Limited

The brief audited consolidated financial information of the Company for the last three financial years are provided below:

[In Rs. Lakh]

ParticularsJune 30, 2020 (Unaudited)12 Months period ended March 31
(Audited)
2020202020192018
Total Income1,761.859,847.1912,587.599,462.99
Total Expenses (excluding depreciation & interest)1,468.928,549.0610,513.668,189.81
Interest1.8411.5829.0331.56
Depreciation78.37436.45543.22454.08
Profit before tax212.72850.101,501.68787.54
Provision for tax
(including Deferred Tax)
60.00181.44361.96101.36
Profit /(Loss) after tax152.72668.661,139.72686.18
Equity Share Capital458.22458.22*458.22458.22
Reserve and Surplus7,044.306,891.586,620.945,605.90
Networth7,502.527,349.817,079.166,064.12
Total Debt

Magna Electro Castings Limited Buyback Dates

Date of Board Meeting approving the BuybackSeptember 18, 2020
Date of publication of Public Announcement for BuybackSeptember 22, 2020
Record Date for determining the Buyback Entitlement and the names of Eligible ShareholdersOctober 1, 2020
Buyback Opening dateOctober 27,2020
Buyback Closing dateNovember 10, 2020
Last Date of verification of Tender Forms by the RegistrarNovember 17, 2020
Last date of intimation regarding acceptance / non-acceptance of Tendered Equity Shares to the BSE Limited by the RegistrarNovember 18, 2020
*Last date of Settlement of Bids on the BSE LimitedNovember 19, 2020
Last date of return of unaccepted Equity Shares by BSE LimitedNovember 19, 2020
*Last date of Extinguishment of Equity SharesNovember 26, 2020

Details of Public Announcement

The Public Announcement was published on September 22, 2020 in the following newspapers, in accordance with Regulation 7(i) of the Buyback Regulations, within two working days from the date of declaration of results of the Postal Ballot or special resolution:

PublicationLanguageEdition
Financial ExpressEnglishAll Editions
JansattaHindiAll Editions
Makkal KuralTamilCoimbatore Edition

Necessity of Magna Electro Castings Limited Buyback

Buyback is the acquisition by a company of its own shares. Buyback is an efficient form of returning surplus cash to the members holding Equity Shares of the Company, inter-alia, for the following reasons:

i. The Buyback will help the Company to return surplus cash to its members holding Equity Shares broadly in proportion to their shareholding, thereby, enhancing the overall return to members;

ii. The 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. 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”;

iii. The Buyback would help in improving return on equity, by reduction in the equity base, thereby leading to long term increase in shareholders‟ value; and

iv. 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 Buyback Offer or they may choose to not participate and enjoy a resultant increase in their percentage shareholding, post the Buyback Offer, without additional investment.


Impact of Magna Electro Castings Limited Buyback on the Company

The Company believes the Buyback is not likely to cause any material impact on the profitability/ earnings of the Company except for the cost of financing the Buyback, being a reduction in the treasury income that the Company could have otherwise earned on the funds deployed.

We 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 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 latest audited financial statement of the Company for the half year ended March 31, 2020 are as under:

Parameters (based on audited standalone financial statements for year ended March 31, 2020)Pre Buy-backPost Buy-back
(Assuming Full Acceptance)
Net worth (Rs in crores)7,349.816,649.81
Return on Net worth (%)9.1010.06
Earnings Per Share (Rs)14.5915.99
Book Value per Share (Rs)160.40159.00
Price / Earnings Ratio (P/E)**6.936.32
Total Debt / Equity RatioNILNIL

Basis of Calculating Magna Electro Castings Buyback Price

The Buyback Offer Price of Rs. 175/- per Equity Share has been arrived at after considering various factors such as the average closing prices of the Equity Shares on the Stock Exchange where the Equity Shares of the Company are listed, the net-worth of the Company and the impact of the Buyback on the key financial ratios of the Company

The Buyback Price represents

(i) a premium of 45.65 % over the volume weighted average price of the Equity Shares on BSE for 3 months preceding September 14, 2020 being the date of intimation to the Stock Exchange for the Board Meeting to consider the proposal of the Buyback (“Intimation Date”);

(ii) premium of 39.91 % over the volume weighted average price of the equity Shares on BSE for 2 weeks preceding Intimation Date ; and

(iii) premium of 23.50 % over the closing market price of the Equity Shares on BSE on Intimation Date.


Source of Funds for the Buyback

The Buyback shall be made out of the free reserves of the Company as at March 31, 2020 (i.e. the last standalone audited financial statements available as on the date of Board Meeting recommending the proposal of the Buyback).

This 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 the details of such transfer shall be disclosed in its subsequent audited balance sheet.

The funds for the Buyback will be met out of internally generated cash resources of the Company. The Company does not intend to raise additional debt for the explicit purposes of the Buyback. Accordingly, borrowed funds will not be used for the Buyback. However, if required, the Company may borrow funds in the ordinary course of its business.


Magna Electro Castings Limited – Manager to the Buyback

IDBI CAPITAL MARKETS & SECURITIES LIMITED
6th Floor, IDBI Tower, WTC Complex, Cuffe Parade,
Mumbai – 400 005, Maharashtra, India
Contact Person: Indrajit Bhagat/Chandresh Sharma
Tel No.:+91 (22) 2217 1700; Fax No.: +91 (22) 2215 1787
Email: magnabuyback2020@idbicapital.com;
Website: www.idbicapital.com
SEBI Registration Number: INM000010866;
Validity Period: Permanent
Corporate Identity Number: U65990MH1993GOI075578

Magna Electro Castings Limited – Registrar to the Buyback

S.K.D.C. CONSULTANTS LIMITED
PB No. 2016, “Kanapathy Towers”, 3rd Floor, 1391/A1, Sathy Road, Ganapathy Post, Coimbatore – 641006, TN, India
Contact Person: K. Jayakumar;
Tel: +91 422 4958995, 2539835/ 836; Fax: +91 422 2539837;
E-mail: info@skdc-consultants.com;
Website: www.skdc-consultants.com;
SEBI Registration INR000000775;
Validity Period: Permanent
Corporate Identity Number: U74140TZ1998PLC008301

Magna Electro Castings Limited Contact Details

Company Contact Details
MAGNA ELECTRO CASTINGS LIMITED
Registered Office: 43 (Old No 62), Balasundaram Road, Coimbatore – 641018 Tamilnadu.
CIN: L31103TZ1990PLC002836
Contact Person: Sangeetha C, Company Secretary & Compliance Officer
Tel.: + 91 422 2240109| Fax: + 91 422 2246209 | E-mail: info@magnacast.com| Website: www.magnacast.com

 


Magna Electro Castings Limited Buyback News

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

News 2 – Magna Electro Castings Ltd – Public Announcement


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