Piramal Enterprises’ Share Buyback Open: Key Things to Know Before You Tender Shares – News18

Repurchase of Piramal Enterprises: The Piramal Enterprises share repurchase began today, August 31, and offers shareholders the opportunity to earn an 18 percent premium over the prevailing share price.

It remains open for eligible shareholders of the company to apply for the offer until September 6, 2023. The share repurchase of Piramal Enterprises is being offered at Rs 1250 per share and the share repurchase will be made through the tender route. Piramal Enterprises Ltd aims to use up to Rs 1,750 crore from its capital reserves for share repurchases.

Piramal Enterprises has already notified the Indian stock exchanges about the share repurchase stating, “The Board of Directors of the company has approved the repurchase of up to 1,40,00,000 (only One Crore Forty Lakh) fully paid shares of the company with a face value of Rs.2/- (only rupees two), for a total amount not exceeding Rs. 1,750 Crore (Rupees One Thousand Seven Hundred Fifty Crore only), each at a price of Rs. 1,250/- (only rupees one thousand two hundred and fifty) per share of shares on a proportional basis through the tender offer process.”

Registration date of Piramal Enterprises

The record date for the buyback of Piramal Enterprises was August 25, 2023. This means that those who have purchased shares of Adani Enterprises until August 24, 2023 and own the scrip on August 25, 2023 are eligible for this buyback offer.

Repurchase Acceptance Ratio of Piramal Enterprises

The share price of Piramal Enterprises is currently at around Rs 1,060 each, meaning a buyback offer is available at a premium of almost 18 percent. Therefore, a higher number of applications is expected and the acceptance rate is expected to remain lower.

What should private investors do?

ICICI Securities has advised “private shareholders”, those who own 188 or fewer shares, to repurchase shares for a profit, given the premium and likely high underwriting rate. The buyback closes on September 6.

“With the recent equity pattern published by the company, we expect the consumer adoption rate to exceed 30 percent. With promoters not participating in the buyback, we believe the acceptance rate for other classes should be close to 10 percent or higher,” ICICI Securities analysts said in a note.

ICICI Securities said the roadmap for Piramal Enterprises to deliver business growth and RoA improvement bodes well. “However, given the volatile performance in the wholesale portfolio, offering a buyback offer seems beneficial,” it added.

Shares of Piramal Enterprises traded marginally in the green in the morning, rising about 0.2 percent to Rs 1,052. The stock is up more than 37 percent over the past six months, surpassing Nifty’s 12 percent return over that period.