Ramkrishna Forgings Buyback Review, Offer Details, Price, Dates, Size & more

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

Ramkrishna Forgings Limited Buyback Details

Buyback TypeOpen Market
Opening DateApril 3, 2020
Closing DateSeptember 27, 2020
Buyback Offer AmountRs.40,00,00,000/-
Buyback No. of Shares1600000
Face ValueRs.10
Date of Buyback ApprovalMarch 21, 2020
Date of Public AnnouncementMarch 24, 2020
Buy Back PriceRs.250
Buy Back Premium21.27%%
Date of Board MeetingMarch 20, 2020

Ramkrishna Forgings Buyback Opening and Closing Date

The starting and closing date of this buyback is from April 3, 2020 to September 27, 2020.

Ramkrishna Forgings Buyback Cash Offer

Cash Offer to Buy-back up to 1600000 fully paid-up equity shares of the Company of face value of Rs.10 each, representing 25% of the total number of equity shares.

Ramkrishna Forgings Buyback Record Date

The decided record date is March 26, 2020.

Ramkrishna Forgings Buyback Price

At a price of Rs.250 per Equity Share.

Ramkrishna Forgings Buyback Size

At a buyback price of Rs.250 payable in cash for an aggregate maximum amount of Rs.40,00,00,000.

Ramkrishna Forgings 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.


Ramkrishna Forgings 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%200250500001900012.26%
40%4002501000003800024.52%
60%6002501500005700036.77%
80%8002502000007600049.03%
100%10002502500009500061.29%

Profit is calculated from March 16, 2020 share price i.e. Rs.155 per share of Ramkrishna Forgings Limited.

According to the above table, if a shareowner applies for 1000 shares of Ramkrishna Forgings limited & gets 20% acceptance from the company and the owner with 1000 shares will sell 200 shares @ Rs.250 per share & receive Rs.19000 as profit amount & 12.26% 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.250 & receive a profit of Rs.57000 @ 36.77% profit percentage.


Ramkrishna Forgings Limited Buyback Overview

Ramkrishna Forgings BuybackM/s. Ramkrishna Forgings Limited (“RKFL”) was originally incorporated under the provisions of the Companies Act, 1956 on 12.11.1981 as a Private Limited Company under the name and style “Ramkrishna Forgings Private Limited” with the Registrar of Companies, West Bengal. Subsequently, the name of the Company was changed to its present name pursuant to the receipt of the shareholders approval on 25.05.1995.

The Company was incorporated with an objective to manufacture forged products. Over the years, RKFL increased forging and die making capacities and added machining and heat treatment facilities, including isothermal annealing, which enabled to undertake manufacturing of components for Original Equipment Manufacturer [“OEMs”] and Tier 1 companies.

RKFL is head-quartered in Kolkata and operates five manufacturing facilities located in eastern India which offers close proximity to key automobile manufacturing hubs and key suppliers of raw materials.


Company Finances – Ramkrishna Forgings Limited

The brief audited consolidated financial information of the Company for the last three financial years and limited review financial information for the 6 months ended September 30, 2019 are provided below:

[In Rs. Lakhs]

ParticularsFor the period ended Sept 2019 (Unaudited)12 Months period ended March 31
(Audited)
201920182017
Total Income64,065.881,80,967.581,45,752.0296,019.66
Total Expenses (excluding Interest, depreciation)52,046.361,42,718.741,16,908.6679,422.25
Finance Cost3,787.207,921.706,982.037,497.98
Depreciation and Amortization6,097.5512,083.338,440.217,472.81
Profit before tax2,134.7718,243.8113,421.121,626.62
Deferred Tax232.752,408.381,119.363.18
Profit /(Loss) after tax1,418.5211,931.089,466.021,092.31
Equity Share Capital3,260.773,260.683,259.152,866.99
Reserves81,332.1680,483.4969,112.7240,541.77
Networth88,138.9387,290.1875,917.8846,954.77
Total Debt91,534.2488,149.2182,321.2293,551.88

Ramkrishna Forgings Limited Buyback Dates

Date of Board Meeting approving the BuybackMarch 21, 2020
Date of publication of Public Announcement for BuybackMarch 24, 2020
Record Date for determining the Buyback Entitlement and the names of Eligible Shareholders[●]
Buyback Opening dateApril 3, 2020
Buyback Closing dateSeptember 27, 2020
Last Date of verification of Tender Forms by the Registrar[●]
Last date of intimation regarding acceptance / non-acceptance of Tendered Equity Shares to the BSE Limited by the Registrar[●]
*Last date of Settlement of Bids on the BSE Limited[●]
Last date of return of unaccepted Equity Shares by BSE Limited[●]
*Last date of Extinguishment of Equity Shares[●]

Details of Public Announcement

This Public Announcement (“Public Announcement”/ “PA”) is being made in relation to the Buyback of Equity Shares of M/s. Ramkrishna Forgings Limited (“Company” or “RKFL”) from the open market through stock exchange mechanism, pursuant to the provisions of Regulation 16(iv)(b) and other applicable provisions of the Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018 (“Buyback Regulations”) and, inter-alia, contains the disclosures as specified in Schedule IV to the Buyback Regulations.


Necessity of Ramkrishna Forgings Limited Buyback

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

(a) optimize returns to shareholders;

(b) enhance overall shareholders’ value and

(c) optimize the capital structure.

The above objectives will be achieved by returning part of surplus cash back to members through the Buyback process. This will lead to reduction in outstanding Equity Shares, improvement in earnings per share, based on the assumption that the Company would earn similar profits as in the past, and enhanced return on equity capital.

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.


Impact of Ramkrishna Forgings Limited Buyback on the Company

The Buyback is expected to enhance overall long term members’ value for continuing members, without compromising on the future growth opportunities of the Company, as well as provide an exit opportunity to the public shareholders.

The Buyback is not likely to cause any material adverse impact on the earnings of the Company, except a reduction in the treasury income which the Company could have otherwise earned from investments in fixed deposits and mutual funds.

This Buyback is proposed, considering the accumulated surplus funds available with the Company being in excess of the surplus amount needed to be retained by the Company for future growth of the Company as envisaged by the Board.

The Buyback may lead to reduction in outstanding Equity Shares, improvement in ‘earnings per share’ and enhanced return on equity, assuming that the Company would earn similar profits as in the past.

In accordance with Section 68(2)(d) of the Companies Act, the ratio of the aggregate of secured and unsecured debts owed by the Company shall not be more than twice the paid up Equity Share capital and free reserves post the Buyback.

The Company shall not raise further capital for a period of 1 (one) year from the expiry of the Buyback Period, except in discharge of its subsisting obligations like allotment of shares under Employee Stock Option Schemes etc.

Salient financial parameters consequent to the Buyback based on the latest audited financial statement of the Company for the half year ended March 31, 2019 are as under:

Parameters (based on audited standalone financial statements for year ended March 31, 2019)Pre Buy-backPost Buy-back
(Assuming Full Acceptance)
Net worth (Rs in Lakhs)
Return on Net worth (%)
Earnings Per Share Basic (Rs)
Earnings Per Share Diluted (Rs)
Book Value per Share (Rs)
Total Debt / Equity Ratio

Basis of Calculating Ramkrishna Forgings Buyback Price

The Equity Shares of the Company are proposed to be bought back at the Buyback Price, i.e., Rs.250/-(Rupees Two Hundred Fifty Only) per Equity Share.

The Maximum Buyback Price of Rs. 250/- per Equity Share has been arrived at after considering various factors, including but not limited to, the average of the weekly high and low of the closing price of the Equity Shares on NSE (the recognized Stock Exchange where the maximum volume of trading in the equity shares is recorded) for a period of 2 weeks preceding the date of Board Meeting i.e., till 20.03.2020), the net worth and performance of the Company. The Maximum Buyback Price excludes the Transaction Costs.

The Buyback Price represents

  • A premium of 1.07% and 21.27% compared to the average of the weekly high and low of the closing prices of the Equity Shares on the NSE (the recognized Stock Exchange where the maximum volume of trading in the equity shares is recorded), for a period of 2 weeks preceding the date of intimation of the Board Meeting i.e., till 17.03.2020) and for a period of 2 weeks preceding the date of Board Meeting i.e., till 20.03.2020) respectively.

The ratio of the aggregate of secured and unsecured debts owed by the Company after Buyback shall not be more than twice the paid-up capital and free reserves based on both audited standalone and consolidated financial statements as at 31.03.2019 of the Company.


Source of Funds for the Buyback

The actual number of Equity Shares bought back will depend upon the actual price paid for the Buyback, excluding the Transaction Costs paid for the Equity Shares bought back, and the aggregate amount paid in the Buyback, subject to the Maximum Buyback Size.

The Buyback (including the Transaction Costs) will be funded from the accumulated surplus funds available with the Company, in the form of cash and/ or out of internal accruals of the Company.

It is proposed to Buyback upto 4.81% and 4.82% of the paid-up share capital and free reserves based on the audited financial statements of the Company as at March 31, 2019 on standalone and consolidated basis respectively, from the open market through the Stock Exchanges. The Buyback of Equity Shares will result in a reduction in number of shares accompanied by a likely increase in EPS and return on capital employed. The Company believes that the Buyback will create long term value for continuing shareholders.


Ramkrishna Forgings Limited – Manager to the Buyback

VC CORPORATE ADVISORS PRIVATE LIMITED,
CIN: U67120WB2005PTC106051
SEBI REGN. NO.: INM000011096
Validity of Registration: Permanent
(Contact Person: Ms. Urvi Belani)
31, Ganesh Chandra Avenue, 2nd Floor,
Suite No. -2C, Kolkata-700 013
Tel. No.: 033 2225 3940
Fax No.: 033 2225 3941
Email Id: mail@vccorporate.com
Website: www.vccorporate.com

Ramkrishna Forgings Limited – Registrar to the Buyback

M/s. KFin Technologies Private Limited
(Formerly known as“Karvy Fintech Private Limited”),
Office: Karvy Selenium, Tower- B, Plot No. 31 & 32,
Financial district, Nanakramguda, Serilingampally Mandal, Hyderabad, Telangana- 500032
SEBI Registration No. INR000000221, CIN: U72400TG2017PTC117649,
Tel. No.: 040 – 67161568; Fax No.: 040- 23420833;
Contact Person:Mr. M S Madhusudan, E-mail Id: madhusudan.ms@kfintech.com;
Website: www.kfintech.com.

Ramkrishna Forgings Limited Contact Details

Company Contact Details
Ramkrishna Forgings Limited
CIN No.: L74210WB1981PLC034281; Registered Office: 23, Circus Avenue, Kolkata- 700017;
Tel. No.: (033) 4082 0900 / 7122 0900; Fax No.: (033) 4082 0998 / 7122 0998;
E-mail Id: neha.gupta@ramkrishnaforgings.com; Website: www.ramkrishnaforgings.com

 


Ramkrishna Forgings Limited Buyback News

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

News 2 – Ramkrishna Forgings Ltd – Public Announcement


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