Welspun Corp Buyback Review, Offer Details, Price, Dates, Size & more

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

Welspun Corp Limited Buyback Details

Buyback Type Tender Offer
Opening Date 14 Aug 19
Closing Date 28 Aug 19
Buyback Offer Amount 390 Cr
Buyback No. of Shares 28,888,888
Face Value Rs. 5
Date of Buyback Approval June 24, 2019
Date of Public Announcement June 26, 2019
Buy Back Price Rs. 135/-
Buy Back Premium 10.89%
Date of Board Meeting May 15, 2019

Welspun Corp Buyback Opening and Closing Date

The starting and closing date of this buyback is from October 22, 2019 to November 5, 2019.

Welspun Corp Buyback Cash Offer

The Cash Offer to Buy-back up to 28,888,888 fully paid-up equity shares of the Company of face value of Rs. 5 each, representing 10.89% of the total number of equity shares.

Welspun Corp Buyback Record Date

The decided record date is July 5, 2019.

Welspun Corp Buyback Price

At a price of Rs.135/- per Equity Share.

Welspun Corp Buyback Size

At a buyback price of Rs.135/- payable in cash for an aggregate consideration not exceeding Rs. 3900 cr

Welspun Corp 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.


Welspun Corp Limited 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% 200 135 27000 800 0.61%
40% 400 135 54000 1600 1.22%
60% 600 135 81000 2400 1.83%
80% 800 135 108000 3200 2.44%
100% 1000 135 135000 4000 3.05%

Profit is calculated from 17th Oct 2019 share price i.e. Rs.131 per share of Welspun Corp Limited.

According to the above table, if a shareowner applies for 1000 shares of Welspun Corp limited & gets 20% acceptance from the company and the owner with 1000 shares will sell 200 shares @ Rs.135 per share & receive Rs.800 as profit amount & 0.61 % 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.135 & receive a profit of Rs.2400 @ 1.83 % profit percentage.


Welspun Corp Limited Buyback Overview

Welspun Corp Limited (“Welspun Corp” or the “Company”) an Indian company incorporated on December 29, 1945, is a leading global information technology, consulting and business process services company. The Company has over 1,70,000 dedicated employees serving clients across six continents.

The name of the Company was changed from Western India Vegetable Products Limited to Welspun Corp Products Limited on June 7, 1977, and subsequently to Welspun Corp Limited on April 28, 1984. The Company has its registered office situated at Doddakannelli, Sarjapur Road, Bengaluru 560 035, India.

The Company shifted its registered office from the State of Maharashtra to the State of Karnataka on July 10, 1996. The Equity Shares of the Company were listed in the year 1995 on the NSE (Code: Welspun Corp) and an application for listing of equity shares was filed with BSE in the year 1946-47 (Code: 507685). The ADRs of the Company were listed on NYSE (Code: WIT) in the year 2000. The ISIN Number of the Company is INE075A01022.


Company Finances – Welspun Corp Limited

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

[In Rs. Lakhs]

Particulars For the quarter
ended June-19
(Unaudited)
12 Months period ended March 31
(Audited)
2019 2018 2017
Total Income 20,888.70 90,881.24 64,921.15 62,600.65
Total Expenses (excluding finance cost, depreciation & amortization) 18,473.00 83,803.91 57,820.02 55,230.51
Interest 394.50 1,773.71 1,773.71 2,357.14
Depreciation and amortization expenses 544.80 2,597.33 2,581.56 3,860.80
Profit before tax 1,645.00 1,820.97 1,958.90 359.19
Provision for tax
(including Deferred Tax)
383.70 1,222.55 202.14 258.04
Profit /(Loss) after tax 1,186.30 (216.51) 1,530.09 101.15
Equity Share Capital 1,326.13 1,326.13 1,326.13 1,326.13
Other Equity 26,599.64 27,780.30 27,903.63
Networth 27,925.77 29,106.43 29,229.76
Total Debt (Excluding working capital loans) 13,046.98 13,864.29 18,429.78

Welspun Corp Limited Buyback Dates

Date of Board Meeting approving the Buyback May 15, 2019
Date of publication of Public Announcement for Buyback June 26, 2019
Record Date for determining the Buyback Entitlement and the names of Eligible Shareholders July 5, 2019
Buyback Opening date October 22, 2019
Buyback Closing date November 5, 2019
Last Date of verification of Tender Forms by the Registrar November 7, 2019
Last date of intimation regarding acceptance / non-acceptance of Tendered Equity Shares to the BSE Limited by the Registrar November 14, 2019
*Last date of Settlement of Bids on the BSE Limited November 15, 2019
Last date of return of unaccepted Equity Shares by BSE Limited November 15, 2019
*Last date of Extinguishment of Equity Shares November 22, 2019

Details of Public Announcement

The Public Announcement dated June 25, 2019 was published on June 26, 2019 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 approving the Buyback, on June 24, 2019:

Publication Language Edition
Financial Express English All editions
Jansatta Hindi All editions
Kutch Mitra Gujarati Bhuj Edition

Necessity of Welspun Corp Limited Buyback

In the opinion of the Board, the Buyback is a more efficient form of returning surplus cash to the Shareholders of the Company, inter-alia, for the following reasons.

  • Share buyback is the acquisition by a company of its own Equity Shares. 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 the Shareholders.
  • The Buyback, which is being implemented through the Tender Offer route as prescribed under the Buyback 14 Regulations, would involve allocation of higher of number of Equity Shares as per their entitlement or 15% of the number of Equity Shares to be bought back, reserved for the small shareholders.
  • The Buyback may help in improving return on equity, by reduction in the equity base, which may consequently lead to a long term increase in shareholders’ value.
  • Buyback gives an option to the Shareholders 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, without any
    additional investment.

Impact of Welspun Corp Limited Buyback on the Company

Buyback is not likely to cause any 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.

The Buyback is not expected to impact growth opportunities for the Company.

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 results as on March 31, 2019
are as under:

Parameters (based on audited standalone financial statements for year ended March 31, 2018) Pre Buy-back Post Buy-back
(Assuming Full Acceptance)
Net worth (Rs in Lakhs) 16,370.09 12,470.09
Return on Net worth (%) (11.96%)% (15.69%)%
Earnings Per Share (Rs) (10.45) (11.73)
Book Value per Share (Rs) 61.72 52.76
P/E as per the latest audited standalone financial statements
Total Debt / Equity Ratio 0.46 0.60

Basis of Calculating Welspun Corp Buyback Price

Equity Shares of the Company are proposed to be bought back at a price of Rs. 135/- per Equity Shares (the “Buyback Price”).

Buyback Price has been arrived at after considering various factors including, but not limited to the trends in the market prices of the Equity Shares on the Stock Exchanges where the Equity Shares 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 Equity Share.

The Buyback Price of Rs. 135/- per Equity Share represents a discount of 3.57% and 3.81% over the closing market price of the Equity Shares on the BSE and on the NSE respectively, as on May 9, 2019, being the date on which the Company intimated the Stock Exchanges of the date of the meeting of the Board wherein proposal of the Buyback was to be considered.

More on Welspun Corp Buyback Price Calculation

Further, the Buyback Price represents a premium of 9.25% and 9.26% over the average closing market prices of the Equity Shares on BSE and on NSE, respectively, during the three months preceding May 9, 2019, being the date on which the Company intimated the Stock Exchanges of the date of the meeting of the Board of Directors, wherein the proposal of the Buyback was to be considered.


Source of Funds for the Buyback

Assuming full acceptance, the funds that would be deployed by the Company for the purposes of the Buyback, would be Rs. 3,900 Million excluding any expense incurred or to be incurred for the Buyback like filing fees payable to the Securities and Exchange Board of India, brokerage, applicable taxes such as securities transaction taxes, goods and services tax, stamp duty, advisors’ fees, public announcement publication expenses, printing and dispatch expenses and other incidental and related expenses.


Welspun Corp Limited – Manager to the Buyback

Axis Capital Limited
1st Floor, Axis House, C-2 Wadia International Centre,
P.B. Marg, Worli, Mumbai – 400025
Tel: +91 22 4325 2183; Fax: + 91 22 4325 3000
Email: [email protected]
Contact Person : Mr. Sagar Jatakiya
SEBI Registration: INM000012029
Validity Period: : Perpetual
CIN: U51900MH2005PLC157853

Welspun Corp 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
Tel: +91 22 4918 6200; Fax: +91 22 4918 6195
Email: [email protected]
Contact Person: Mr. Sumeet Deshpande
SEBI Registration: INR000004058
Validity Period : Permanent Registration
CIN: U67190MH1999PTC118368

Welspun Corp Limited Contact Details

Company Contact Details
Welspun Corp Limited
CIN: L27100GJ1995PLC025609
Registered Office: Welspun City, Village Versamedi, Taluka Anjar, District Kutch, Gujarat-370 110, India.
Corporate Office: Welspun House, 5th Floor, Kamala City, Senapati Bapat Marg, Lower Parel (West), Mumbai- 400 013,
Maharashtra, India.
Tel.: +91 22 6613 6000; Fax: +91 22 2490 8020
E-mail: [email protected]; Website: www.welspuncorp.com
Contact Person: Mr. Pradeep Joshi, Company Secretary and Compliance Officer

 


Welspun Corp Limited Buyback News

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

News 2 – Welspun Corp Ltd – Public Announcement


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