Balrampur Chini Mills- Buyback Case study

Part 3

For this part let us assume that the date today is 01/03/2017.

Actual Tendering Status

On 1st March 2017, through post buyback public announcement , we come to know about the tendering status. Under Small Shareholder only 15% have tendered their shares and Under General shareholder only 17% have tendered. 

Under General Category, there are two groups one is promoter and other in non- promoter. The promoter have tendered only upto entitled I.e around 38 lacs and rest 3.70 shares( 4.07-.38) are tendered by non promoter that comes out that 28% of non promoter general shareholder have tendered their shares. 

Post Buyback Shareholding pattern

Total 1 cr share are to be bought back, nearly 38 lac share are bought back from promoters and 15 lacs shares have bought back from Small shareholder and rest 47 lacs are bought back from general non promoter shareholder for that their acceptance have come out approximately 4.

Conclusion

Under Small shareholder category where we participated 66 out 100 have accepted and remaining share have sold at 153/- gives us 30% pre tax return. Our aggregate return come out 25.5% in the period of approx 2 months. 

If one would took position as General shareholder , one would have earned 17 % pre tax return. As post buyback price have risen beyond our estimated range. 

Real acceptance may differ from case to case depending on the individual capital involved. However cases like these can be used as an approximation. Actual exact returns may vary.

 Purpose:

The purpose of such case studies is to help all of us become better investors. Cases like these are practice before the main match. Thinking on these various steps can help us develop patterns for what do if these situations would have occurred with us. We would love to know what you would have done at various stages in this case.

May we all Learn together

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