Bosch Buyback

The Board of Directors of Bosch Ltd. have approved buy-back of upto 1,028,100 fully paid equity shares of the Company at a price of Rs. 21,000 per share aggregating to about Rs. 21,59 crore. Bosch Buyback represents 3.37% of the paid-up equity share capital of the Company and is on a proportionate basis under  “Tender Offer” route.

See List of all Forthcoming and Recent Buybacks
Bosch Buyback 2018 and 2016
Particulars
Buyback 2018
Buyback 2016
Announcement of Intent for Buyback02-11-18
Market price a day before this (Rs.)18,690
Board meeting for Buyback14-11-1801-07-16
Buy Back Type Tender Offer Tender Offer
Buy Back Price21,00023,000
Market Price before Board meeting19,62522,864
Market Price a day after Board meeting19,40822249
% Premium on Market Price7.01%0.59%
Buy Back Size in Rs. Crore2159.012019.77
Buy Back Size ( Shares)1,028,100878,160
Equity Capital in crore30.5231.40
Tot Number of shares30,520,74031,398,900
Face Value of Share in Rs.1010
% Buyback3.37%2.80%
Record Date 06-10-16
Market Price as on RD for buybackYet to Happen23,098
Buy Back Issue dateYet to Happen0-10-16: 21-10-16
Market Price on issue Closing DateYet to Happen22,633
Indicative Mrkt Pr aft return of Shares21,915
Buyback Shares reserved for Retail 154,215131,724
No. of Retail Shrholders-RD Buyback25,671
No. of Retail Shares on RD BuybackYet to Happen82,680
% Retail on RD of share capital0.26%
Buyback EntitlementYet to Happen100%
No. retail Shareholders who bidYet to Happen
Shares Tendered by retailYet to Happen1748
Tendering ratioYet to Happen2.11%
Retail responseYet to Happen
Overall Retail AceeptanceYet to Happen100%
Bosch Buyback: A Framework to Estimate Acceptance Ratio:

This framework is based on estimation of shareholding of Bosch Ltd shareholders  who hold around 10 number of shares. To this we have added estimates for 
1) Few additional purchase  of Shares by existing shareholders with eye on earning additional returns through buyback.
2) Purchase of Shares by arbitrage investors. 
3) Inputs from last buyback

Based on approximations indicated above, the entitlement ratio for Bosch Buyback is expected to be quite high. Further most investors in Bosch Ltd are long term and may not part with the shares and under normal circumstances Bosch Buyback could have an acceptance ratio of 100%.

Cross Tabulation of Estimated Returns for Bosch 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.

Shares Purchased
9
Nos.
Share Buyback Price21000
Tabulation of Absolute Returns
A) Based on Share Price at time of Post
Share Purchase Price taken19350Investment174150Rs.
Acceptance Ratio / Price Aft Buyback 18000185001900019500
90%6.98%7.24%7.49%7.75%
100%8.53%8.53%8.53%8.53%
A) Based on Current Market Price (Live)
Share Purchase Price taken19102.00Investment171918Rs.
Acceptance Ratio / Price Aft Buyback 18000185001900019500
90%8.37%8.63%8.89%9.15%
100%9.94%9.94%9.94%9.94%
This post is purely for informative and educational purpose and is in no way suggestive of taking any position in the counter. Profit or Loss in  any buy sell operation in stocks is associated with significant risk of capital loss. For more on Buyback Benefits and other issues please refer the earlier Posts
 Buyback of Shares: A Primer for Retail Investors
About Bosch Ltd :
  • Bosch is a world leading multinational engineering and electronics company headquartered in Germany.
  • In India, Bosch is a leading supplier of technology and services in the areas of Mobility Solutions,Industrial Technology, Consumer Goods, and Energy and Building Technology.
  • Bosch has, in India, the largest development center outside Germany, for end to end engineering and technology solutions.
  • The Bosch Group operates in India through thirteen companies, viz, Bosch Limited, Bosch Chassis Systems India Private Limited, Bosch Rexroth (India) Private Limited, Robert Bosch Engineering and Business Solutions Private Limited, Bosch Automotive Electronics India Private Limited, Bosch Electrical Drives India Private Limited, BSH Home Appliances Private Limited, ETAS Automotive India Private Limited, Robert Bosch Automotive Steering Private Limited, Automobility Services and Solutions Private Limited, Newtech Filter India Private Limited, Mivin Engg. Technologies Private Limited and Precision Seals Manufacturing Limited.
  • In India, Bosch set-up its manufacturing operation in 1951, which has grown to include 18 manufacturing sites, and seven development and application centers.
Bosch Ltd : Summary of Financials,  Stock Price Trend
ParameterFigures
Market Cap (in ₹ Cr.)59,088.08
Earning Per Share  ( TTM) 513
Price To Earnings 37.74
Book Value3272.56
Price To BV5.92
EBIT Margin (%)17.22
PAT Margin (%)11.55
ROCE (%)21.77
 Debt to Equity Ratio0


Bosch Buyback share price chart

Assessment: Bosch Buyback
  • The Bosch Group is a leading global supplier of technology and services.
  • In Q2FY19, Total revenue from operations grew by 13.8 percent yoy. PAT stood at 13.1 percent of sales, an increase of 18.9 percent.
  • PAT for first half of business year increased 29.7 percent over the same period of previous year
  • Bosch buyback 2016 resulted in 100% acceptance. The Buyback took 4 months to complete.
  • In line with earlier Buyback, Bosch Buyback 2018 is also not significantly higher than its current market price.
  • From an arbitrage angle, at present rates and considering good possibility of 100% acceptance ratio, Bosch Buyback may be suitable for for arbitrage investors looking for 5-6% absolute return in 3-4 months period. These are my estimates only and please do your own diligence in this matter as even what may appear as totally safe arbitrage investments in stock markets have inherent risks.

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 a high degree of inherent risk. Further the data in the post is prone to errors.