Piramal Enterprises share buyback is offered at Rs 1250 per share; Should you tender shares?
Piramal Enterprises’ Buyback: The share buyback of Piramal Enterprises opened today, August 31, offering shareholders an opportunity to earn an 18 per cent premium above the prevailing share price.
It will remain open for eligible shareholders of the company to apply for the offer till September 6, 2023. Piramal Enterprises share buyback is offered at Rs 1250 per share and buyback of shares will be done through the tender route. Piramal Enterprises Ltd aims to use up to Rs 1,750 crore from its capital reserves for buyback of shares.
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Piramal Enterprises has already informed Indian stock market bourses about the buyback of shares citing, “The Board of Directors of the Company have approved the buyback of up to 1,40,00,000 (One Crore Forty Lakh only) fully paid-up equity shares of the Company of face value of Rs.2/- (Rupees Two only), for an aggregate amount not exceeding Rs. 1,750 Crore (Rupees One Thousand Seven Hundred Fifty Crore only), each at a price of Rs. 1,250/- (Rupees One Thousand Two Hundred and Fifty only) per equity share on a proportionate basis through the tender offer process.”
Piramal Enterprises’ Record Date
The record date for Piramal Enterprises buyback was on August 25, 2023. This means those who bought Adani Enterprises shares till August 24, 2023 and hold the scrip on August 25, 2023, are eligible for this buyback offer.
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Piramal Enterprises’ Buyback Acceptance Ratio
Piramal Enterprises’ share price today is around Rs 1,060 apiece, which means buyback offer is available at a premium of near 18 per cent. Hence, higher number of application is expected and hence acceptance ratio is expected to remain lower.
What Should Retail Investors Do?
ICICI Securities has advised “retail shareholders”, those holding 188 or fewer shares, to tender shares in the buyback to pocket gains, considering the premium and the likely high acceptance ratio. The buyback closes September 6.
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“With the recent shareholding pattern published by the company, we expect the acceptance ratio for retail clients to be north of 30 per cent. Also, since promoters are not participating in the buyback, we believe that acceptance ratio for other categories should be near 10 per cent or higher,” ICICI Securities analysts said in a note.
ICICI Securities said the roadmap for Piramal Enterprises to attain business growth and improvement in RoA bodes well. “However, given volatile performance in the wholesale book, tendering in buyback offer seems favourable,” it added.
Piramal Enterprises stock was trading marginally in green in the morning, up about 0.2 per cent at Rs 1,052. The stock has gained over 37 per cent in the last six months, beating a 12 per cent return of Nifty during the period.
