Metroglobal


Metroglobal Limited had informed BSE that the meeting of the Board of Directors of the Company is scheduled on 30/03/2019 ,inter alia, to consider the proposal of Buy-back of Equity Shares of the Company. Metroglobal Buyback as approved by the Board comprises Buy-back of up to 40,00,000 (Forty Lakhs) fully paid up Equity Shares of face value of Rs. 10 each at a price of Rs. 56/- per Equity Share for an amount not exceeding Rs. 22.4 crore. Metroglobal Buyback represents approximately 24.5% of the total paid-up Equity Share Capital of the Company and is on a proportionate basis under “Tender Offer” route. The Board has fixed Friday, April 12, 2019, as the Record Date for the purpose of determining the entitlement and the names of the equity shareholders who are eligible to participate in the Buy-back

See List of all Forthcoming and Recent Buybacks

Buyback News

Metroglobal Buyback 2019 & 2018 : Key Info

Buyback 19
Type Tender
MP befo announcement33.5
Announcement 20-03-19
MP after above40.2
MP befo BM38.9
Board meet30-04-19
MP after BM
Buy Back Price56
% Premium on MP43.96%
BuyBack Size- Rs. Cr22.4
BuyBack Size- Shares4,000,000
Tot No.of shares16,326,742
% Buyback24.50%
Equity Capital- cr16.33
FV of Share in Rs.10
Record Date12-04-19
Buy Back Issue date
MP 1 day befo end dt
Shares reserved- Retail 600,000
Shareholders on RD
Shares on RD Yet to Happen
Buyback EntitlementYet to Happen
Shares Tendered Yet to Happen
Tendering ratioYet to Happen
Retail responseYet to Happen
Aceeptance %Yet to Happen


Metroglobal Buyback : Acceptance Ratio Possibilities:

This framework is based on estimation of shareholding of Metroglobal ltd. shareholders  who hold around 4000 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 & data of last buyback

Based on approximations indicated above and considering a moderate tendering ratio, under normal circumstances MetroGlobal Buyback could have acceptance ratio of more than 60% a figure that will also depend to some extent on new arbitrage investors who buy into the stock and the tendering ratio.

Return Scenarios: Metroglobal 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. We have depicted  some scenarios for Absolute Returns in a table form as a function of various possible combinations of Acceptance Ratios and Price Post Buyback.

Shares Bought
4500
Nos.
Buyback Price56
Absolute Returns
Price (live)53.50
investment (Rs.)240750
MP Aft Buybk
Acceptance %454851
60%-3.55%-1.31%0.93%
75%-0.47%0.93%2.34%
90%2.62%3.18%3.74%
100%4.67%4.67%4.67%

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 Metroglobal Ltd.

  • The company was formerly known as Global Boards Limited
  • The name of the company has been changed to
    MetroGlobal Ltd. (Formerly known as Global Boards Limited) w.e.f 02/09/2011, after Amalgamation of Metrochem Industries Limited with Global Boards Limited.

Metroglobal : Price Trend, Summary of Financials

Metroglobal price chart

Financial Overview

Market Cap- Rs. Cr88.67
Revenue FY18 – cr327
CMP in Rs.54.3
Face Value10
Price / Earning (PE)5.56
Book Value204.32
Price / BV0.27
ROCE %4.07%
ROE  %3.42%
Dividend Yield0.00%
Sales 3 yr CAGR-4.59 %
Debt / Equity Ratio0.23
52 week High/Low84.00 / 43.70

Assessment: Metroglobal Buyback

  • Company has been making profits buy has not paid any dividend.
  • MetroGlobal Buyback Review is trading at 0.27 times its book value.
  • The company was formed after amalgamation of Metrochem Industries Limited (MCIL) with Global Boards Limited (GBL) in 2011.
  • As the company does not have the requirement to go for postal ballot and seek share holders approval , RD has already been announced and the buyback should move at a relatively faster pace.
  • Metroglobal is a small cap which may make it volatile post Buyback.
  • The stock has moved up in anticipation of buyback and is hovering around the buyback price. Unless there is some correction, I do not intend to participate in Metroglobal buyback.

Standard disclaimer: Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering and Management . Iam also Certified in some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2). This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/ Buy Back/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.