“Approved the offer to Buy-back up to 65,00,000 (Sixty-Five lacs only) fully paid-up
Equity Shares of Face Value of ₹1/- (Rupee one only) each of the Company, representing
approximately 2.76% of the total number of equity shares in the total paid-up equity share
capital of the Company, for an aggregate amount not exceeding ₹32,500 Lacs (Rupees
Thirty-Two Thousands Five Hundred Lacs only) (hereinafter referred to as the
“Buyback Size”), which is 6.94% and 6.96% of the aggregate of the fully paid-up Equity
Share capital and free reserves (including securities premium) as per the latest audited
standalone and consolidated financial statements of the Company as on 31st March 2023,
respectively, at ₹500 (Rupees Five-Hundred only) per Equity Share (the “Buyback
Price” and such buyback, the “Buyback”).
The Buyback Size does not include any expenses incurred or to be incurred for the purpose
of undertaking the Buyback, including but not limited to the filing fees, advisory fees,
public announcement publication expenses, printing and dispatch expenses, transaction
costs viz. brokerage, applicable taxes such as buyback tax, securities transaction tax, goods
and service tax, stamp duty, etc. and other incidental and related expenses.
The buyback is proposed to be undertaken through the tender offer route using the stock
exchange mechanism notified by SEBI vide circular CIR/CFD/POLICYCELL/1/2015
dated 13 April 2015, as amended, read with thecirculars issued in relation thereto, including
the circular CFD/DCR2/CIR/P/2016/131 dated 09th December 2016, circular
SEBI/HO/CFD/DCR-III/CIR/P/202l/615 dated 13th August 2021 and circular
SEBI/HO/CFD/PoD-2/P/CIR/2023/35 dated 08th March 2023, and such other
circulars as may be applicable, including any amendment thereof, in accordance with the
provisions contained in the SEBI (Buy-Back of Securities) Regulations, 2018 (hereinafter
referred to as the “Buyback Regulations”) and the Companies Act, 2013, as amended,
and rules made thereunder.
Fixation of Record Date: Pursuant to Regulation 42 of the SEBI Listing Regulations and
Regulation 9(i) of the Buyback Regulations, the Board has fixed Friday 25th August 2023,
as the record date for the purpose of determining the entitlement and names of the
shareholders eligible to participate in the Buyback.
The Board took note of the intention of the members of thThe Board took note of the intention of the members of the promoter & promoters group
to participate in the Proposed Buyback. The Board has also approved the constitution of
a Buyback Committee with regard to the proposed Buyback and has delegated its powers
to do such acts, deeds, matters, and things as it may, in its absolute discretion, deem
necessary, expedient, usual or proper in relation to the proposed Buyback”
KRBL has reported a revenue growth of 15% YoY with growth in domestic market at 19%. EBIDTA and margins are broadly flat YoY
Overall export performance was disappointing. Export revenue excl Q4 slip over to Q1 would be only 120 cr. Big YoY fall.
Saudi market is not getting stabilized. After selecting a new distributor a year back they have again started to look for a new distributor for Saudi. This time last distributor was asking for higher discount and credit that’s why company has stopped working with them. Management is guiding to finalise distributor by 15th Aug and expecting revenue to increase significantly from H2FY24.
Interestingly, there was no discussion abt the 8000 cr guidance which was given multiple time in past concalls.
One positive was the buyback after many years of shareholders request.
Key Notes:
Total cash on books 1200 cr
Margin guidance - 17-18 % - long term average.
@tarun2586 : Revenue guidance FY25- 7500 - 8000 Crore - On track with it- Drivers : Good domestic response on Non-Basmathi , overall Basmathi consumption is growing, exports to continue.
No clear answer on why promoter should participate in the Buyback.
The buyback has been announced at 500/- but stock is hovering around 400. Can anyone give some insight?
Last year as soon as buyback was announced in one of companies I was tracking, stock price caught up with buyback price with only difference being it was open market buyback.
I think the buyback is kind of a joke if you hold more than 500 shares of krbl as you entitled to only 5 shares out of 208 equity shares in your demat ,If you hold less than 500 shares you are entitled to 51 shares out of 292 shares.this is considering if there is 100% participation rate.
This is extremely unfair if you fall in the general category of shareholders as small shareholders get 17% entitlement ratio vs only 2.5% to big shareholders.
@raku The share was trading around 400 or below when they annouced the buyback, so if a person had 500 shares bought around announcement time or just before that his avg buy price would be less than 2,00,000 which falls in retail category. Company is buying 65 lakh shares ( 325 cr )
It seems very unfair for the investors who had shown faith in the company and invested more than 2 lakh.
In Retail category buyback ratio is 51 shares for 291 holding shares and for general it is 5 shares for every 208 shares
True this only promotes trading and not long term investing ,there are threads on twitter about calculation of short term profits and of people buying shares just to get advantage of the buyback.compared to people holding it for years.
I don’t know why such decision was taken,I have sold all my holdings as the stock rallied as short term investors might be picking up stock today for buyback reselling.
@ raky Buyback is one of the ways an investor can benefit but ut is not the only way. In my humble opinio Wealth is created only if you study the stock, monitor it, allocate wealth and sit on it for long term
There are few things going on for krbl
The buyback where the record date was 25th Aug after which you are not eligible for buyback of shares bought thereafter
There is ban imposed by govt on non basmati rice and recently have also put a 20% export duty on paraboiled rice, inspite of these the stock is trading near it 52 week high
Q2 is expected to give decent result as the procurement season is in Q3 and Q4 where the inventory levels will be high impacting the topline
4.From 1st Aug 2023 govt has made it mandatory to sell basmati rice in packages so these regulations will elevate benchmark of basmati rice and help in increasing sales.
5.Distribution is now setup in saudi arabia and sales expected to start from 15th August 2023 so 45 days of Q2 will witness sales numbers from Saudi too
Company aiming to distribute 15% of pat as dividends, also ongoing capex is around 200 to 250 cr and not to mention that if Govt decides to lift the export ban than stock price will witness a bug jump
I believe that most of the people dont buy stocks from a buyback prospective, the long term returns matter if company is solid. Happy investing !!!
Company had a distributor for Saudi arabia but there was a fallout as the distributor was demanding credit which was against company policy so after due diligence krbl has found a new distributor for Saudi and i beleive the sales have already begun (15th aug )
Source : Q1 FY24 Earnings call
The promoter decision to participate in the buyback ,this only tells me that they also feel that 500 price is a good price to sell there holdings which is only 20% more then the current price.
2)I had invested as an cyclical bet when p.e was less then 8,price to book was around 1 ish and there were a lot of negative sentiments :-one of them being the promoter was sent to jail in the chopper case.With nifty being all time high and the stock facing a lot of tailwinds :ban on rice,pakistan floods,company enjoying peak margins ,stok trading at high pe ,book value historically.
3)currently rice price are at an all time high and this was reflected in there margin erosion in the last few quarters due to high procurement cost of rice.I feel there is chancd that there might be inventory write offs if the price of rice fall next year due to good production.
4)I see this as a cyclical stock as although India gate is great brand but i don’t see people starting to consume more rice then they already do and they don’t have the bargaining power this was evident in them not being able to find a distributor for so long.
5)Poor use of cash ,them trying diversify has only burned cash ,i would have rather saved money to clear more debt or not take debt to procure inventory or backward integrated by buying land to produce there own rice.I feel this buyback is also a way to offload there own holding at a premium price.
I might be wrong prices of rice may rise further but promoter participating in the buyback also did not give me the confidence to hold onto my gains so i decided to sell.
I would just like to comment on the first point. I think rather than valuation. We should see this buyback as nothing but dividend which would have been tax efficient way for them to receive funds from the company.
