In this article, we will discuss the Shervani Industrial Syndicate Limited Buyback offer, buyback price, buyback size, record date, company financial, buyback necessity and its impact on company.
Shervani Industrial Syndicate Buyback Details
| Buyback Type | Tender Offer |
| Buyback Opening Date | May 09, 2019 |
| Buyback Closing Date | May 22, 2019 |
| Buyback Offer Amount | Rs. 20,75,00,000/- |
| Buyback No. of Shares | 4,15,000 |
| Face Value | Rs. 10/- |
| Date of Buyback Approval | January 30, 2019 |
| Date of Public Announcement | March 15, 2019 |
| Buy Back Price | Rs. 500/- |
| Buy Back Premium | – |
Shervani Industrial Syndicate Buyback Opening and Closing Date
The starting and closing date of this buyback is from May 09, 2019 to May 22, 2019.
Shervani Industrial Syndicate Buyback Cash Offer
The Cash Offer to Buy-back up to 4,15,000 (Four Lakhs Fifteen Thousand) fully paid-up equity shares of the Company of face value of Rs. 10 each.
Shervani Industrial Syndicate Buyback Record Date
The decided record date is Friday, March 29, 2019.
Shervani Industrial Syndicate Buyback Price
At a price of Rs. 500/- (Rupees Five Hundred Only) per Equity Share.
Shervani Industrial Syndicate Buyback Size
The Buyback is for an aggregate amount not exceeding Rs. 20,75,00,000/ (Rupees Twenty Crores Seventy-Five Lakhs only).
Shervani Industrial Syndicate 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% |
| 20% | 200 | 500 | 100000 | -21000 | -3.47% |
| 40% | 400 | 500 | 200000 | -42000 | -6.94% |
| 60% | 600 | 500 | 300000 | -63000 | -10.41% |
| 80% | 800 | 500 | 400000 | -84000 | -13.88% |
| 100% | 1000 | 500 | 500000 | -105000 | -17.36% |
Profit is calculated from 27th Ma7 2019 share price i.e. Rs.605 per share of Shervani Industrial Syndicate Limited.
According to the above table, if a share owner applies for 1000 shares of Shervani Industrial Syndicate limited & gets 20% acceptance from the company, the owner of this 1000 shares will sell 200 shares @ Rs.500 per share & receive Rs.(-21000) as profit amount & -3.47% 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.500 & receive a profit of Rs.(-63000) @ -10.41% profit percentage.
Shervani Industrial Syndicate Limited Buyback Overview
The company was incorporated on 25th February 1948 as ‘Great Eastern Electroplaters Limited’ with the objective of carrying out the business of colour and chromium plating of consumer items under the Companies Act 1913. The name of the company was subsequently changed to “Geep Flashlight Industries Limited” to identify with the new business activity i.e. manufacture and sale of flashlight cases (torches).
Subsequently, the company expanded its product stream to include manufacture and sale of miniature lamps, dry cell batteries as well as trading of other consumer items. The name of the company was, on 9th August, 1979, changed to ‘Geep Industrial Syndicate Limited’.
Thereafter the Company sold the “GEEP” brand, design, art work, distribution network alongwith marketing assets to ‘Gillette Group’ and consequently, the name of the Company was again changed to ‘Shervani Industrial Syndicate Limited’ (SISL). Subsequently, the company diversified and changed its main business into Real Estate.
Company Finances – Shervani Industrial Syndicate Limited
The salient features of the financial information of the Company as extracted from the standalone audited financial statements of the Company for the last three financial years ended March 31, 2018, March 31, 2017 and March 31, 2016 and Unaudited Limited Review Financial Results for the six months period ended September 30, 2018 are set out below:
[In Rs. Lakhs]
| Key Financials | Limited Review for the 6 months period ended 30.09.2018 (Unaudited Figures) | Year ended 31 March, 2018 (Audited figures) | Year ended 31 March, 2017 (Audited figures) | Year ended 31 March, 2016 (Audited figures) |
| Revenue from Operations | 1002.00 | 11303.11 | 4175.65 | 2837.19 |
| Other Income | 204.00 | 150.04 | 166.55 | 106.58 |
| Total Revenue | 1206.00 | 11453.15 | 4342.20 | 2943.77 |
| Expenses | ||||
| Construction /Development Expenses-Real Estate | 1482.00 | 1954.00 | 961.99 | 1101.48 |
| Changes in Inventories of Finished goods, Stock in Trade and Work in Progress | (994.00) | 4286.02 | 1830.40 | 1299.30 |
| Employee Benefit expense | 69.00 | 195.22 | 95.50 | 92.80 |
| Finance Cost | 11.00 | 9.08 | 19.88 | 50.77 |
| Depreciation and Amortization | 28.00 | 40.00 | 29.19 | 29.41 |
| Selling Expense | 13 | – | ||
| Other expenses | 135.00 | 333.65 | 255.75 | 338.54 |
| Total Expenses | 744.00 | 6817.77 | 3192.72 | 2912.30 |
| Profit/ ( Loss ) before Exceptional Items& Tax Expenses | 462.00 | 4635.38 | 1149.49 | 31.48 |
| Exceptional Items | 0 | 0 | 352.84 | 78.61 |
| Profit/(Loss) before Tax | 462.00 | 4635.38 | 1502.33 | 110.09 |
| Tax Expenses ( including Deferred tax) | 0 | 906.54 | (1.36) | 13.35 |
| Net Profit/(Loss) for the period | 462.00 | 3728.84 | 1503.69 | 96.74 |
| Other Comprehensive income / (Loss) (net of tax) | (67.00) | 43.49 | 12.92 | 0 |
| Total Comprehensive Income /(Loss) (after Tax) | 395.00 | 3772.33 | 1516.61 | 96.74 |
| Paid Up Share Capital | 313.60 | 313.60 | 328.03 | 328.03 |
| Reserve and Surplus ( excluding Capital Reserve and Revaluation Reserve) | 5533 | 8161.56 | 4917.12 | 3413.43 |
| Net Worth | 5846.60 | 8475.16 | 5245.15 | 3741.46 |
| Total debt | 781.00 | 682.46 | 100.54 | 791.74 |
Shervani Industrial Syndicate Limited Buyback Dates
| Date of the Board meeting held to approve the proposal for Buy-back of Equity Shares | 30.01.2019, Wednesday |
| Date of publication of Public Announcement for the Buy-back | 18.03.2019, Monday |
| Record Date for determining the Buy-back Entitlement and the Eligible Shareholders | 29.03.2019, Friday |
| Buy-back opens on / Buy-back Opening Date | 09.05.2019, Thursday |
| Buy-back closes on / Buy-back Closing Date | 22.05.2019, Wednesday |
| Last date of verification by Registrar to Buy-back | 29.05.2019, Wednesday |
| 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 | 30.05.2019, Thursday |
| Last date of settlement of bids on the Stock Exchange | 31.05.2019, Friday |
| Last date of return of unaccepted demat shares by Stock Exchange to Seller Member / Broker | 31.05.2019, Friday |
| Last date of extinguishment of Equity Shares bought back | 07.06.2019, Friday |
Necessity of Shervani Industrial Syndicate Limited Buyback
After considering several factors and benefits, the Board decided to recommend Buyback of equity shares from the shareholders of the Company, inter-alia, for the following reasons:
- The Buyback will help the Company to return surplus cash to its shareholders holding equity shares broadly in proportion to their shareholding, thereby, enhancing the overall return to shareholders;
- The Buyback would help in improving return on equity by a reduction in the share capital base and increasing shareholder value in the longer term;
- The Buyback gives an option to the shareholders holding equity shares of the Company, who can choose to participate and get cash in lieu of shares to be accepted under the Buyback offer or they may choose not to participate and be benefitted of a resultant increase in their percentage shareholding, post the Buyback offer, without additional investment;
- Optimizes the capital structure;
- Mitigating the Short Term Market Volatility.
Impact of Shervani Industrial Syndicate Limited Buyback on the Company
We believe that 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.
Assuming response to the Buyback is to the extent of 100% (full acceptance) from all the Eligible Shareholders up to their entitlement, the aggregate shareholding of the Promoter and Promoter Group Companies after the completion of the Buyback shall increase to 64.18% of the post-Buyback total paid-up equity share capital of the Company from 63.00% of the pre-Buyback total paid-up equity share capital of the Company, and the aggregate shareholding of the public in the Company shall decrease to 35.82% of the post-Buyback total paid-up equity share capital of the Company from 37% of the pre-Buyback total paid-up equity share capital 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 pursuant to the Buyback based on the Standalone and Consolidated audited financial statements of the Company for the year ended March 31, 2018, are set out below:
| Consolidated | Standalone | |||
| Parameters | Pre Buy- back | Post Buy- back | Pre Buy- back | Post Buy- back |
| Net Worth (Rs. in Lakhs) | 8475.16 | 8323.36 | 6400.17 | 6248.36 |
| Return on Net Worth (%) | 44.00% | 45.23% | 58.26% | 60.26% |
| Earnings Per Share (EPS) (Basic) (in Rs.) | 118.90 | 120.06 | 138.05 | 139.39 |
| Book Value per share (in Rs.) | 271.99 | 267.12 | 236.95 | 231.33 |
| Price / Earnings Multiple | 5.24 | 5.19 | 4.52 | 4.47 |
| Total Debt / Equity Ratio | 0.081 | 0.082 | 0.106 | 0.109 |
Basis of Calculating Shervani Industrial Syndicate Buyback Price
The Buyback Offer Price has been arrived at after considering various factors including, but not limited to the trends in the volume weighted average prices and closing price of the Shares on the BSE where the shares of the Company 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 share.
More on Shervani Industrial Syndicate Buyback Price Calculation
The Board of Directors approved the Buyback Offer Price after considering various factors such as book value per share, earnings per share, price earning capitalization value, trading and market price of shares at BSE etc.
Pre and post Buyback calculations are based on audited standalone and consolidated financials respectively of the Company as on March 31, 2018.
The post Buyback numbers are calculated by reducing the net worth by the proposed Buyback amount (assuming full acceptance) without factoring in any impact on the statement of profit and loss and reducing the no. of equity shares of the Company to the extent of 4,15,000 equity shares proposed to be bought back by the Company.
Net worth excludes revaluation reserves.
Source of Funds for the Buyback
The funds for the implementation of the Buyback will be sourced out of the free reserves of the Company and/or such other sources as may be permitted by the Buyback Regulations or the Companies Act.
The Company shall transfer from its free reserves, a sum equal to the nominal value of the Shares bought back through the Buyback to the capital redemption reserve account, and the details of such transfer shall be disclosed in its balance sheet.
The funds borrowed, if any, from banks and financial institutions will not be used for the Buyback.
Shervani Industrial Syndicate Limited – Manager to the Buyback
| VC CORPORATE ADVISORS PRIVATE LIMITED CIN:U67120WB2005PTC106051 SEBI REGN NO: INM000011096 Validity period: Permanent Registration (Contact Person: Mr. Anup Kumar Sharma) 31 Ganesh Chandra Avenue, 2nd Floor, Suite No –2C, Kolkata-700 013 Phone No : (033) 2225-3940 / 3941 Fax : (033) 2225-3941 Email: [email protected] |
Shervani Industrial Syndicate Limited – Registrar to the Buyback
| LINK INTIME INDIA PRIVATE LIMITED CIN: U67190MH1999PTC118368 SEBI REGN NO:INR000004058 Validity period: Permanent Registration (Contact Person: Mr. Sumeet Deshpande) C-101, 247 Park, 1st Floor, L.B.S. Marg Vikhroli (West), Mumbai -400 083 Phone No: +91 22 49186200 Fax : +91 22 49186195 Email-Id: [email protected] |
Shervani Industrial Syndicate Limited Contact Details
| Company Contact Details |
| SHERVANI INDUSTRIAL SYNDICATE LIMITED CIN: L45202UP1948PLC001891 Registered Office: Shervani Nagar, Sulem Sarai, Harwara, Prayagraj (Allahabad)- 211015 Tel no: 91- 7311128115; Fax: 91- 532 2436928; Email: [email protected]; Website: www.shervaniind.com Company Secretary and Compliance Officer: Mr. S K Shukla |
Shervani Industrial Syndicate Limited Buyback News
News 1 – Buyback PDF / Letter of Offer [Download]
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