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.
Bosch Buyback 2018 and 2016
|Announcement of Intent for Buyback||02-11-18|
|Market price a day before this (Rs.)||18,690|
|Board meeting for Buyback||14-11-18||01-07-16|
|Buy Back Type||Tender Offer||Tender Offer|
|Buy Back Price||21,000||23,000|
|Market Price before Board meeting||19,625||22,864|
|Market Price a day after Board meeting||19,408||22249|
|% Premium on Market Price||7.01%||0.59%|
|Buy Back Size in Rs. Crore||2159.01||2019.77|
|Buy Back Size ( Shares)||1,028,100||878,160|
|Equity Capital in crore||30.52||31.40|
|Tot Number of shares||30,520,740||31,398,900|
|Face Value of Share in Rs.||10||10|
|Market Price as on RD for buyback||Yet to Happen||23,098|
|Buy Back Issue date||Yet to Happen||0-10-16: 21-10-16|
|Market Price on issue Closing Date||Yet to Happen||22,633|
|Indicative Mrkt Pr aft return of Shares||21,915|
|Buyback Shares reserved for Retail||154,215||131,724|
|No. of Retail Shrholders-RD Buyback||25,671|
|No. of Retail Shares on RD Buyback||Yet to Happen||82,680|
|% Retail on RD of share capital||0.26%|
|Buyback Entitlement||Yet to Happen||100%|
|No. retail Shareholders who bid||Yet to Happen|
|Shares Tendered by retail||Yet to Happen||1748|
|Tendering ratio||Yet to Happen||2.11%|
|Retail response||Yet to Happen|
|Overall Retail Aceeptance||Yet to Happen||100%|
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.
|Share Buyback Price||21000|
|MP when Posted||19350|
|Pr. aft Buybk|
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
|Market Cap (in ₹ Cr.)||59,088.08|
|Earning Per Share ( TTM)||513|
|Price To Earnings||37.74|
|Price To BV||5.92|
|EBIT Margin (%)||17.22|
|PAT Margin (%)||11.55|
|Debt to Equity Ratio||0|
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.