Update on Buyback of eClerx:
eClerx 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 9 July 2024 and will be lasting till 15 July 2024. The last date of payment of consideration amount to the eligible shareholders who participated in the buyback is 22 July 2024.
Entitlement Ratio for Retail Shareholders in the Buyback of eClerx:
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 1:6. This means that eClerx will accept or buyout at least 1 share(s) out of every 6 share(s) from these shareholders.
Entitlement Ratio for Non-Retail Shareholders in the Buyback of eClerx:
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 10:409. This means that eClerx will accept or buyout at least 10 share(s) out of every 409 share(s) from these shareholders.
For the shares which are tendered to eClerx, the company will make the payment of the buyback amount by 22 July 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 |
2800 |
| Closing Rate |
2516.75 |
| No. of Shares to be eligible for Retail category |
79 |
| Investment Value to be eligible for Retail category |
198823.25 |
Analysis of Buyback of eClerx:
| Acceptance Ratio (in %) |
10 |
20 |
30 |
40 |
50 |
60 |
70 |
80 |
90 |
100 |
| Shares Accepted |
7 |
15 |
23 |
31 |
39 |
47 |
55 |
63 |
71 |
79 |
| Profit (in Rs.) |
1982.75 |
4248.75 |
6514.75 |
8780.75 |
11046.75 |
13312.75 |
15578.75 |
17844.75 |
20110.75 |
22376.75 |
| Absolute Returns (in %) |
1 |
2.14 |
3.28 |
4.42 |
5.56 |
6.7 |
7.84 |
8.98 |
10.11 |
11.25 |
| Annualized Returns (in %) |
20.22 |
43.33 |
66.44 |
89.55 |
112.66 |
135.78 |
158.89 |
182 |
205.11 |
228.22 |
Notes:
- On a conservative side, the cost of acquisition is considered as closing rate as on record date. i.e. Rs. 2516.75.
- After the completion of the buyback, the remaining shares of eClerx are sold at closing rate as on the record date. i.e. Rs. 2516.75
- Brokerage, STT, ETT, SEBI Fees, and IPFT contribution are not factored
Please find some helpful FAQs on the buyback of eClerx below:
1. What are the available categories for tendering shares in a buyback offer of eClerx?
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 4 July 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 eClerx 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 eClerx before the buyback order window concludes to tender them for the buyback.
3. What is the procedure for tendering shares of eClerx 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 eClerx on (or after) the record date, which is 4 July 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 eClerx?
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 eClerx. 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 eClerx announced?
The entitlement ratio will be announced by eClerx after the record date which is 4 July 2024.
9. What are the charges for tendering the shares for buyback of eClerx?
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 eClerx 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 eClerx. 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.