Triveni Turbine Ltd. on 29/10/18 informed of a meeting of the Board of Directors of the Company to consider and approve unaudited financial results for the quarter ended September 30, 2018 and also consider a proposal for for buy-back of the equity shares. As approved in board meeting on 01/11/18, Triveni Turbine Buyback comprises buyback of equity shares of the Company having a face value of Re. 1/- each on a proportionate basis, through the “Tender Offer” route. Triveni Turbine Buyback is at a price of Rs. 150/- for an aggregate amount not exceeding Rs. 100 crore for 66,66,666 Equity Shares. Triveni Turbine Buyback represents 2.02% of the total paid-up equity share capital of the Company.
Triveni Turbine Buyback 2018
|Announcement of Intent for Buyback||29-10-18|
|Market price a day before this (Rs.)||99|
|Board meeting for Buyback||01-11-18|
|Buy Back Type||Tender Offer|
|Buy Back Price||150|
|Market Price before Board meeting||103|
|Market Price a day after Board meeting||112.55|
|% Premium on Market Price||45.63%|
|Buy Back Size in Rs. Crore||100|
|Buy Back Size ( Shares)||6,666,666|
|Equity Capital in crore||33.00|
|Tot Number of shares||329,972,150|
|Face Value of Share in Rs.||1|
|Market Price as on RD for buyback||Yet to Happen|
|Market Price on issue Closing Date||Yet to Happen|
|Buy Back Issue date||Yet to Happen|
|Indicative Mrkt Pr aft return of Shares|
|Buyback Shares reserved for Retail||1,000,000|
|No. of Retail Shares on RD Buyback||Yet to Happen|
|Buyback Entitlement||Yet to Happen|
|No. retail Shareholders who bid||Yet to Happen|
|Shares Tendered by retail||Yet to Happen|
|Tendering ratio||Yet to Happen|
|Retail response||Yet to Happen|
|Overall Retail Aceeptance||Yet to Happen|
Triveni Turbine Buyback: A Framework to Estimate Acceptance Ratio:
This framework is based on estimation of shareholding of Triveni Turbine investors who hold around 2000 number of shares as on 31/03/2018. To this we have added estimates for
1) Few additional purchase of Shares by existing shareholders with eye on earning additional returns through buyback. This is expected to be quite low.
2) Purchase of Shares by arbitrage investors.
Based on approximations indicated above, and taking a considerably a relatively high tendering ratio of 65-70%, Triveni Turbine Buyback could have a acceptance ratio in 25%-35%.
Cross Tabulation of Estimated Returns for Triveni Turbine Buyback
The absolute returns/Loss that may accrue to an Investors/Arbitrage trader are a function of Percentage Acceptance Ratio and Price Post Buyback. Investors may kept in mind that stock markets are quite volatile at this juncture and there are many political and other uncertainties related to international markets. We have depicted estimated Absolute Returns in a table form as a function of various possible combinations of Acceptance Ratios and Price Post Buyback.
|Share Buyback Price||150|
|Tabulation of Absolute Returns|
|A) Based on Share Price at time of Post|
|Share Purchase Price taken||112.55||Investment||180080||Rs.|
|Acceptance Ratio / Price Aft Buyback||90||93||96||100|
|A) Based on Current Market Price (Live)|
|Share Purchase Price taken||116.00||Investment||185600||Rs.|
|Acceptance Ratio / Price Aft Buyback||90||93||96||100|
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About Triveni Turbine Ltd.:
- Triveni Turbines is one of the largest manufacturers of industrial steam turbines globally. The Company designs and manufactures steam turbines up to 100 MW, and delivers robust, reliable and efficient end-to-end solutions
- Triveni Turbine Ltd. (TTL) is also one of the largest players globally in the Biomass segment, with ~ 20% market share.
- The Company provides renewable power solutions specifically for Biomass, Independent Power Producers, Sugar & Process Co-generation, Waste-to-Energy and District Heating. Its steam turbines are used in diverse industries, ranging from Sugar, Steel, Textiles, Chemical, Pulp & Paper, Petrochemicals,
Fertilisers, Solvent Extraction, Metals, Palm Oil to Food Processing.
Triveni Turbine Ltd. : Summary of Financials, Stock Price Trend, Qtrly Results
|Market Cap (in ₹ Cr.)||3,695.00|
|Earning Per Share (EPS TTM) Rs.||3.2|
|Price To Earnings (P/E) Ratio||35|
|Book Value Per Share||13.52|
|Price To BV (P/B) Ratio||8.28|
|EBIT Margin (%)||19.94|
|PAT Margin (%)||13.22|
|Debt to Equity (D/E) Ratio||0|
Assessment: Triveni Turbine Buyback
- Triveni Turbine reported inline numbers in Q2FY19 with revenues at same level (yoy) and some improvement in profitability.
- Despite a not so rosy picture in sugar sector, Triveni Turbine may still be able to get healthy order inflow from the sector, as the government’s focus on Ethanol blending and co-generation can drive demand.
- while Power sector suffers from no so rosy outlook, Triveni Turbine focus on renewable, waste to energy and biomass has resulted in good order inflow.
- Triveni Turbine exports are focused largely on waste to energy, renewable and biomass segment and in Q1Fy19, exports accounted for 42% share.
- Promoters holding in the company is high at about 75%.
- After a run up on announcement of buyback price, it may be better to buy the share at dips.
- Triveni turbine stock is not in F&O.
Standard disclaimer: I am not a SEBI registered analyst. I may have vested interest in every stock I discuss. Please do your own due diligence as stock market investments have high degree of inherent risk.