Cosmo Films Buyback which was approved in its Board meeting on 26-09-20 entails buyback of 12,67,361 equity shares at a price of Rs. 576 per equity share for an aggregate consideration not exceeding Rs.73 Crore. Cosmo Films Buyback amounts to 6.52% of the total number of equity and is through the tender route. The Board has fixed Nov 9, 2020 as the record date for determining the entitlement and the names of the Eligible Shareholders to Cosmo Films Buyback.

See List of all Forthcoming and Recent Buybacks

Cosmo Films Buyback: Updates
  • Entitlement: 7.8%
  • Issue : 27-11:11-12-20
  • RD 09-Nov-20
Cosmo Films Buyback 2020 : Info
Buyback
TypeTender
Announcement 16-09-20
MP befo announcement425.6
MP aft announcement458
MP befo BM470
Board meet21-09-20
Buy Back Price576
% Premium on MP22.55%
BuyBack Size- Rs. Cr73.00
BuyBack Size- Shares1,267,361
Tot No.of shares19,440,076
% Buyback equity6.52%
Equity Capital- cr19.44
FV of Share in Rs.10
Record Date09-11-20
Buy Back Issue date27-10:11-12-20
Shares reserved- Retail 190,104
Shares on RD 2,443,842
Buyback Entitlement7.78%
Shares Tendered
Tendering ratio
Retail response
Aceeptance %
Cosmo Films Buyback: Broad Estimate of Aceeptance % range

1) Few additional purchase  of Shares by existing shareholders with eye on earning additional returns through buyback. 2) Purchase of  few shares by arbitrage investors.

Based on approximations indicated above, the entitlement ratio for Cosmo Films Buyback is expected to be tad below 20%. Buyback could have an acceptance ratio of ~ 10-20%. Earlier figure reported was due to an error in calculation.

Cross Tabulation of Estimated Returns: Cosmo Films 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.

20
400
Nos.
Buyback Price576
Avg Price befo RD446.0
Investment (Rs.)178400
Absolute Returns %
MP Aft Buybk
Acceptance %405420435
10%-5.36%-2.33%0.70%
15%-3.44%-0.58%2.28%
20%-1.52%1.17%3.86%

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 Cosmo Films Limited :
  • Established in 1981 and founded by Mr. Ashok Jaipuria, Cosmo Films today is a global leader in specialty films for packaging, lamination, labeling and synthetic paper.
  • With engineering of innovative products and sustainability solutions, Cosmo Films over the years has been partnering with worlds’ leading F&B and personal care brands and packaging & printing converters to enhance their consumer experience.
  • Company’s film offerings include BOPP and CPP films.The company is the largest exporter of BOPP films from India and also the largest producer of thermal lamination films in the world. Its customer base is spread in more than 100 countries with manufacturing units in India, Korea, USA & Japan.
Cosmo Films Buyback: Stock Price Trend

Assessment: Cosmo Films Buyback

  • Cosmo Films has robust financial fundamentals.
  • Cosmo Films Ltd. has indicated that there will be no change in the Dividend policy.
  • The stock has run up a lot recently but this has been due to favourbale industry trends and stock performance.
  • Stock is providing a good dividend yield of ~3.2%.
  • Company has been maintaining dividend payout of ~ 20%.
  • From an arbitrage angle, with rlow buyback acceptance expectations, Cosmo Films Buyback is not attracctive to arbitrage investors. Any market melt down poses a risk as the total period involved is about 2-2.5 months. I intend to participate in buyback in a moderate quantity.

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. Further the data in the post is prone to errors.