Smartlink Holdings Limited

Smartlink Holdings Ltd has informed Exchanges that the meeting of the Board of Directors of the Company is scheduled on 14/06/2019 to consider and approve the proposal for buyback of fully paid up equity shares of face value of Rs.2/- . Smartlink Buyback approved by its Board comprises proposal to buyback 42,00,000 Equity Shares at a price not exceeding Rs. 130/- (Rupees One Thirty only) per Equity Share for an aggregate amount not exceeding Rs. 54.6 crore. The Smartlink Buyback is approximately 24.78% of the total paid-up equity capital of the Company and is on a proportionate basis under “Tender Offer” route.

See List of all Forthcoming and Recent Buybacks

Buyback Newsuyback

Updates

  • Entitlement 25.03%
  • Issue opens 18-10 : 01-11-19

Smartlink Buyback : Key Info

2019
2018
Type Tender Tender
MP initially8289.6
Announcement 11-06-1904-04-18
MP after this96106.95
MP befo BM97103.65
Board meet14-6-1907-04-18
Buy Back Price130120
% Premium on MP58.54%33.93%
MP after BM 108.3
BuyBack Size Rs. Cr54.667.2
BuyBack Size- Shrs42000005,600,000
Tot No.of shares16,950,00022550000
% Buyback24.78%24.83%
Equity Capital- cr3.394.51
FV of Share in Rs.22
Shares - Retail 630,000840,000
Record Date13-08-1918-05-18
Buy Back Issue date18-10:01-11-1903-06:26-3-18
shrholders on RD11,01513,506
Shares on RD 25168962,966,652
Buyback Entitlement25.03%28.31%
Valid Bids 1,891
Shares Tendered 751902
Tendering ratio 25.35%
Retail response 89.51%
Aceeptance % 100%

Smartlink Buyback : Acceptance Ratio Estimate

This framework is based on estimation of shareholding of Smartlink 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 & feedback from past buybacks in year 2018 and 2016.

Based on approximations indicated above and considering a moderate tendering ratio, under normal circumstances Smartlink Buyback could have acceptance ratio of 35-60%, a figure that will depend significantly on price movement of the stock in coming days & tendering ratio.

Estimated Returns: Smartlink Buyback

Shares Bought
1700
Nos.
Buyback Price130
Absolute Returns
Price posted105.00
Investment (Rs.)178500
MP Aft Buybk
Acceptance %778083
35%-9.00%-7.14%-5.29%
45%-3.95%-2.38%-0.81%
55%1.10%2.38%3.67%

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 Smartlink Holdings Limited

  • The Company was incorporated in 1993 and the registered office of the Company is located at Goa.
  • The name of the Company has been changed from Smartlink Network Systems Limited to Smartlink Holdings Limited in April, 2018.
  • The Holding Company is in the business of Investment of funds in Mutual Funds and other Investments and investments in its subsidiary Companies.
  • The Company has received the Certificate of Registration to carry on the business of non –banking financial institution without accepting public deposits from Reserve Bank of India dated May 2, 2018.
  • The Company has 3 Subsidiaries namely 1. Digisol Systems Limited, 2. Synegra EMS Limited and 3. Telesmart SCS Limited.
  • The Group is in the business of developing, manufacturing, marketing, distributing and servicing of networking products and Structured Cabling products.
  • It has its manufacturing facility for the manufacturing of networking and SCS products at Verna, Goa.
  • The group offers range of products for various communication needs including Switching, Broadband Routing, Wireless LAN and Surveillance.

Smartlink Holdings: Price Trend, Summary of Financials

Smartlink Price Chart

Financial Overview

Market Cap- Rs. Cr184
CMP in Rs.109
Revenue last yr97.2
Net profit-3
Equity Share Capital3.39
Face Value2
EPS TTM-1.90
Price / Earning (PE)NA
Book Value145.45
Price / BV0.75
Dividend Yield0.00%
Debt / Equity Ratio0.08
52 week High/Low107.00 / 68.10

Assessment: Smartlink Buyback

  • SmartLink has been frequently coming up with buybacks and the buyback price and acceptance ratio in the past two buybacks have been quite attractive for the investors.
  • Promoter Holding in Smartlink Holding stands at 73.6%
  • In last Smartlink buyback in Year 2018, the acceptance ration was 100%. This feat is now difficult to repeat as equity has reduced and so retail shares in line with total shares for buyback is less. However a strong movement in price towards buyback price could provide opportunity to many investors to exit and improve acceptance ratio.
  • Smartlink is a holding company and earning are not very impressive. Its performance in FY19 was flat.
  • I do not see much merit to enter smart link buyback at this stage and only a good drop in price will make it attractive. This is despite good acceptance ratio in both the buybacks in year 2016 and year 2018.

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.