Corporate Action – Buyback of Anand Rathi Wealth at Rs. 4450

The board of Anand Rathi Wealth had granted approval for a buyback of 370000 equity shares, with a combined value of up to Rs. 164.65 crores, priced at Rs. 4450 per share. The process, timelines and other requisite details of the Buyback will be set out in the public announcement and the letter of offer will be issued after two working days of the record date which is 3 June 2024.

The detailed announcement by the company can be found here.

Note that, in accordance with Regulation 5 (via) of the Buyback Regulations, Anand Rathi Wealth may (till one working day prior to the record date) increase the maximum Buyback price and decrease the number of securities proposed for buyback such that there is no change in the Buyback size.

You can participate in the buyback if you have holdings of Anand Rathi Wealth as on the record date which is 3 June 2024. In case you are not an existing shareholder and still want to participate in the buyback, make sure to purchase the shares of Anand Rathi Wealth before 3 June 2024 to be eligible for buyback.

The timelines and schedule of the buyback will be announced by Anand Rathi Wealth in the letter of offer, which is published usually two business days after the record date. Stay tuned! we will be sharing the updates on this thread.

What do you think about this Buyback? Feel free to use this thread to discuss.

Update on Buyback of Anand Rathi Wealth:

Anand Rathi Wealth has published the letter of offer for the buyback which has all the information related to the buyback offer. The buyback of the issue will start on 7 June 2024 and will be lasting till 13 June 2024. The last date of payment of consideration amount to the eligible shareholders who participated in the buyback is 21 June 2024.

The entitlement ratio or the buyback ratio for retail or small shareholders (who hold shares of value less than Rs. 2,00,000 as on the record date) is 37:483. This means that Anand Rathi Wealth will accept or buyout at least 37 share(s) out of every 483 share(s) from these shareholders.

The entitlement ratio or the buyback ratio for non-retail or general shareholders (who hold shares of value more than Rs. 2,00,000 as on the record date) is 3:392. This means that Anand Rathi Wealth will accept or buyout at least 3 share(s) out of every 392 share(s) from these shareholders.

For the shares which are tendered to Anand Rathi Wealth, the company will make the payment of the buyback amount by 21 June 2024 directly to your registered bank account.

The detailed announcement by the company can be found here

Let us understand the buyback issue with respect to its profitability

Buyback Rate 4450
Closing Rate 4092.85
No. of Shares to be eligible for Retail category 48
Investment Value to be eligible for Retail category 196456.8

Analysis of Buyback issue at various acceptance ratios:

Acceptance Ratio (in %) 10 20 30 40 50 60 70 80 90 100
Shares Accepted 4 9 14 19 24 28 33 38 43 48
Profit (in Rs.) 1428.6 3214.35 5000.1 6785.85 8571.6 10000.2 11785.95 13571.7 15357.45 17143.2
Absolute Returns (in %) 0.73 1.64 2.55 3.45 4.36 5.09 6 6.91 7.82 8.73
Annualized Returns (in %) 14.75 33.18 51.61 70.04 88.47 103.22 121.65 140.08 158.52 176.95

Notes:

  1. On a conservative side, the cost of acquisition is considered as closing rate as on record date. i.e. Rs. 4092.85.
  2. After the completion of the buyback, the remaining shares of Anand Rathi Wealth are sold at closing rate as on the record date. i.e. Rs. 4092.85
  3. Brokerage, STT, ETT, SEBI Fees, and IPFT contribution are not factored

Please find some helpful FAQs on the buyback of Anand Rathi Wealth below:

1. What are the available categories for tendering shares in a buyback offer of Anand Rathi Wealth?

Shares can be tendered in the buyback through two distinct categories – Retail and General. The determination of the applicable category is based on the value of shares held in the demat account as of 3 June 2024 which is the record date. Shareholders with holdings valued at Rs. 200,000 or below will fall within the Retail category, while those with holdings exceeding Rs. 200,000 will fall into the General category.

2. How to participate in the buyback of Anand Rathi Wealth in case the shares of are pledged for margin?

For buyback, only unencumbered (free) shares can be submitted in the buyback. Therefore, you will need to unpledged the shares of Anand Rathi Wealth before the buyback order window concludes to tender them for the buyback.

3. What is the procedure for tendering shares of Anand Rathi Wealth in the buyback program?

To participate in the buyback, login to Dhan Web > Go to “Money” section and select “Shares Buyback”. From here you can tender the shares for buyback and authorize the process by using CDSL TPIN and OTP for authentication.

4. I had sold the shares of Anand Rathi Wealth on (or after) the record date, which is 3 June 2024. Can I still participate in the buyback offer?

Yes. Since due to T+1 settlement, the shares will be moved out of your demat only on the next settlement date after the record date. Hence on the record date, you maintain eligibility for the buyback. However, in this specific scenario, you will need to procure shares from the open market and subsequently submit them for the buyback before the offer concludes.

5. Can shares greater than the entitlement be tendered for buyback of Anand Rathi Wealth?

Yes. You can opt to submit more shares than your designated entitlement, the acceptance of these additional shares within the buyback will be contingent upon the acceptance ratio determined by Anand Rathi Wealth. Any shares that are not accepted will be re-credited to your demat account by the Registrar and Transfer Agent (RTA).

6. When is the entitlement ratio for the buyback of Anand Rathi Wealth announced?

The entitlement ratio will be announced by Anand Rathi Wealth after the record date which is 3 June 2024.

9. What are the charges for tendering the shares for buyback of Anand Rathi Wealth?

For tendering shares for buyback, Rs. 12.5 + GST will be charged as DP Transaction charges (as the shares will be moving out of your Demat account) and Brokerage will be minimum of 0.03% or Rs. 20 per order.

7. Where will the proceeds of buyback be credited and by when?

The proceeds of the buyback will be credited by Anand Rathi Wealth to your primary bank account. The amount gets credited generally after 15 days after closure of the buyback window.

8. What is the taxation on the proceeds of the buyback amount?

The buyback is taxable on the Anand Rathi Wealth. So as a shareholder, you do not have to pay any tax on the capital gains occurred in the buyback.

What do you think about this Buyback? Feel free to use this thread to discuss.