FDC Ltd. informed that in its Board meeting on 04-08-20, the Board will also consider Proposal to Buyback the fully paid-up equity shares of the Company. FDC Buyback as pproved by its Board on August 07, 2020 proposes to Buyback upto 21,63,000 fully paid up Equity Shares at a price of Rs. 450/- (Rupees Four Hundred Fifty only) per equity share for an aggregate amount not exceeding Rs. 97,33,50,000 (Rupees Ninety Seven Crore Thirty Three Lakh Fifty Thousand only).

FDC Buyback being less than 10% of the Paid Up Capital and free reserves of company will not required shareholders approval. FDC Buyback represents approximately 1.27% of the total paid-up equity capital of the Company and is on a proportionate basis under “Tender Offer” route. FDC has fixed Aug 21, 2020 as the Record Date for the purpose of determining the names of the shareholders who shall be entitled to tender shares under the Buyback Offer.  

See List of all Forthcoming and Recent Buybacks

Buyback News

Updates

  • Issue 16-09:29-09-20
  • Entitlement 8.44%
  • RD 21-08-20

FDC Buyback : Key Info

Buyback20
Buyback 19
Type Tender
MP befo announcement320180.4
Announcement 04-08-2022-05-19
MP after this337184
MP befo BM335198.95
Board meet07-08-2024-05-19
Buy Back Price450350
% Premium on MP34.33%75.92%
BuyBack Size- Rs. Cr97.335120.05
BuyBack Size- Shares2,163,0003,430,000
Tot No.of shares170,973,084174,403,084
% Buyback1.27%1.97%
Equity Capital- cr17.1017.44
FV of Share in Rs.11
Record Date21-08-2007-06-19
Buy Back Issue date16-09:29-09-2001-07:12-07-19
Shares reserved- Retail 324,450514,500
Shares on RD 3,842,0365584891
Buyback Entitlement8.44%9.21%
Shares Tendered 2633394
Tendering ratio47.15%
Retail response511.84%
Aceeptance %19.54%

FDC Buyback : Estimate of Acceptance Ratio:

This framework is based on estimation of shareholding of FDC shareholders  who hold around 1000 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) Data from earlier buyback issues by the company.

Based on approximations indicated above and considering a moderate tendering ratio, under normal circumstances FDC Buyback could have acceptance ratio of around 15%, a figure that will depend significantly on price movement of the stock in coming days.

Estimated Returns: FDC 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 kep 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 Bought
500
Nos.
Buyback Price450
Price (Live)334
Investment (Rs.)167000
Absolute Returns %
MP Aft Buybk
Acceptance %300320335
12%-4.79%0.48%4.43%
17%-2.54%2.43%6.15%
22%-0.30%4.37%7.87%

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 FDC Ltd.

  • Incorporated in 1940, FDC Ltd. (FDC) is predominately a domestic formulation company and has been slowly moving into exports as well.
  • FDC is known for its household OTC brands like Electral (oral rehydration salt), Enerzal (energy drink) besides prescription (Rx) brand of Zifi (anti-infective).
  • The company has a presence in various therapeutic groups like oral rehydration salts, ophthalmology, dermatology, anti-infectives, cardiovascular, anti-diabetics and energy drinks.
  • FDC is a forerunner in manufacturing and marketing of Oral Rehydration Salts (ORS) and Ophthalmics
  • The company markets >300 products in India and exports to over 50 countries. Exports: domestic split is around 25: 75
  • . FDC has also set-up globally approved, multi-location manufacturing facilities for Active Pharmaceuticals Ingredients (APIs) as well as Finished Dosage Forms. These facilities are located at Roha, Waluj and Sinnar in Maharashtra, Verna in Goa and Baddi in Himachal Pradesh. FDC markets more than 300 products in India and exports many of these to over 50 countries.

FDC Ltd. : Price Trend, Summary of Financials

Financial Overview

Market Cap- Rs. Cr5,750
CMP in Rs.336
Revenue – cr. (TTM)1,300
Net profit-cr (TTM)285.13
Equity Share Capital17.1
Face Value1
EPS TTM16.67
Price / Earning (PE)20.17
Book Value90.18
Price / BV3.73
ROCE %23.37%
ROE  %12.74%
Sales 3 yr CAGR2.89%
Dividend Yield0.24%
Debt / Equity Ratio0.01
52 week  H/L Rs. 350.00 / 152.50

Assessment: FDC Ltd.

  • FDC Ltd. reported good Financial performance in Q1FY21 though revenues took a small hit due to Covid-19.
Rs. in Crores
Operating Revenues
EBITDA
EBITDA %
PBT
PAT
EPS
Ql’ 2021
308.18
131.55
42.69
121.36
91.72
5.36
Ql’ 1920
343.52
88.26
25.69
78.09
56.22
3.22
YoY Growth
-10.29%
49.05%
55.41%
63.14%
66.46%
  • FDC has appericiated quite a bit due to strong sentiment towards phrama stocks.
  • FDC overall sales in Indian markets accounted for 75.67% of total consolidated sales for the quarter.
  • API Sales in the Export market were Rs. 15.28 crores in Q1FY21, a increase of 36.36 % over Q 1
  • FDC is focusing on increasing the Export API sales in the coming year.
  • Promoter holding in FDC is about 69%
  • FDC has almost zero debt.
  • As with earlier buybacks by the company, FDC Buyback is at decent premium to existing market price.
  • The issue size is not large, FDC buyback at present price may offer an average to moderate opportunity to arbitrage investors which will legely depend on FDC price post the buyback.
  • FDC is not in F&O and so the price after buyback is quite vulnerable to market conditions.

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.