SH Kelkar

SH Kelkar on 22-05-19 had informed that the Company shall be considering a proposal of Buyback of the fully paid-up equity shares of the at its Board Meeting to be held on 10-06-19. SH Kelkar Buyback approved by its Board comprises proposal to buyback upto 33 lakh fully paid-up equity shares of Rs10 each of the company at a price of Rs180 per equity share payable in cash for an aggregate consideration not exceeding Rs. 59.4 cr. , s. The Adani Ports Buyback is 2.28% of the paid up equity share capital of the Company as on March 31, 2019 and is on a proportionate basis under “Tender Offer” route. The SH Kelkar Buyback Offer Size represents 9.96% & 7.17% of the fully paid-up equity share capital and free reserves as per the audited standalone and consolidated financial statements of the Company for the financial year ended March 31, 2019. Record date for SH Kelkar Buyback is June 20, 2019.

See List of all Forthcoming and Recent Buybacks

Buyback Newsuyback

SH Kelkar Buyback : Key Info

Type
Tender
Announcement 18-01-18
MP befo BM150.75
Board meet7-2-18
Buy Back Price180
% Premium on MP19.40%
MP after BM 145.35
BuyBack Size- Rs. Cr59.4
BuyBack Size- Shares3300000
Tot No.of shares144,620,801
% Buyback2.28%
Equity Capital- cr144.62
FV of Share in Rs.10
Record Date20-06-19
Buy Back Issue date
Shares reserved- Retail 495,000
shrholders on RD
Shares on RD
Buyback Entitlement
Valid Bids
Shares Tendered
Tendering ratio
Retail response
Aceeptance %

SH Kelkar Buyback : Acceptance Ratio Estimate

This framework is based on estimation of shareholding of SH Kelkar shareholders  who hold around 1500 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

Based on approximations indicated above and considering a moderate tendering ratio, under normal circumstances SH Kelkar Buyback could have acceptance ratio of 15-25% (exceptional case 30%), a figure that will depend significantly on price movement of the stock in coming days & tendering ratio.

Estimated Returns: SH Kelkar Buyback

Shares Bought
1200
Nos.
Buyback Price180
Absolute Returns
Price when posted146.00
Investment (Rs.)175200
MP Aft Buybk
Acceptance %133135137
15%-4.08%-2.91%-1.75%
20%-2.47%-1.37%-0.27%
25%-0.86%0.17%1.20%
30%0.75%1.71%2.67%

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 SH Kelkar and Company Limited

  • SH Kelkar and Company Limited is an India-based fragrance and flavors manufacturing company.
  • The Company is engaged in offering fragrances in various categories, such as personal care, hair care, skincare and cosmetics, fabric care, household products and fine fragrances.
  • The Company offers flavors in various categories, such as dairy products, beverages, confectionery, bakery products and pharmaceuticals.

SH Kelkar: Price Trend, Summary of Financials

adani ports and special economic zone ltd price chart

Financial Overview

Market Cap- Rs. Cr2,114
CMP in Rs.146
Revenue 12 m ttm694
Net profit-cr ttm45
Equity Share Capital144.62
Face Value10
EPS TTM3.11
Price / Earning (PE)46.99
Book Value41.25
Price / BV3.54
ROCE %16.54%
ROE  %10.87%
Dividend Yield1.20%
Sales 3 yr CAGR13.12%
Debt / Equity Ratio0.15
52 week High/Low248.00 / 136.65

Assessment: SH Kelkar Buyback

  • The Buyback is within the statutory limits of 10% of the fully paid-up equity share capital and free reserves and thus it does not need shareholders approval through postal ballot.
  • SHK has been maintaining a healthy dividend payout of about 35%.
  • SHK had entered into an agreement to acquire Italy based – Creative Flavours and Fragrances SpA (CFF) in January 2018 for the acquisition of 100% share capital of CFF, in tranches, over two to three years. In the first tranche, the company had acquired a 51% stake in 2018. The remaining stake will be acquired within three years.
  • SH Kelkar had a poor quarter Q4FY19 as depicted below
ParticularsMar-19Dec-18Sep-18Jun-18Mar-18
Net Sales164.64171.73196.26159.46199.74
Total Income170.34179.97199.71162.9203.37
PBIDT20.3120.5224.518.5829.5
Interest2.851.640.911.111.38
PBDT17.4618.8823.5917.4728.12
PAT11.949.3913.899.7716.5
EPS0.840.660.970.681.14
Equity144.62144.62144.62144.62144.62
Face Value1010101010
PBIDTM(%)12.3411.9512.4811.6514.77
PBDTM(%)10.610.9912.0210.9614.08
PATM(%) 7.255.477.086.138.26
  • SHK earnings has been volatile over the past quarters. 
  • Poor domestic off take has impacted performance in 4QFY19
  • Company has low levels of debt.
  • Adani Ports Buyback price is at a moderate premium to its prevailing market price which has been under pressure due to poor results in the last quarter.
  • SH Kelkar stock is not in F&O which may keep the stock volatile post buyback.
  • In case I participate in SH Kelkar Buyback buyback, it will be in very small way.

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.