Granules ₹250 crore buyback to open on Sept. 27

The ₹250-crore share buyback offer of drugmaker Granules India will open on September 27.

The company is proposing to buyback up to 62.50 lakh shares (face value of ₹1 each) at a price of ₹400 apiece. Compared to Friday’s closing price of ₹315.85 on the BSE, the offer price is nearly 27% more.

The buyback price represents a premium of 45.02% and 46.61% over the volume weighted average market price of the equity shares on NSE and BSE respectively, during the three months period preceding July 29, 2022 (being the date of intimation to the Stock Exchanges regarding Board Meeting date to consider the proposal of the buyback).

The proposed buyback represents 2.52% of the total equity shares. The company has set August 23 as the record date.

As required under the regulations, equity shares to be bought back are divided into two categories — reserved category for small shareholders; and general category for all other eligible shareholders, according to the letter of offer document that Granules shared with the stock exchanges. The buyback offer will close on October 11.

The buyback size is 9.93% and 9.92% of the aggregate of the fully paid-up equity share capital and free reserves, including securities premium account, the company said.

The promoter and promoter group hold 41.93% of equity shares. In terms of the Buyback regulations, under the Tender Offer route, promoters, members of the promoter group and persons in control of the company have the option to participate in a buyback. The Promoter and members of the Promoter Group had on August 9 had expressed their intention to participate in the buyback and tender equity shares based to the extent of their entitlement.

Assuming response to the buyback is 100% (full acceptance) from all the eligible shareholders up to their entitlement, the aggregate shareholding of the promoter and promoter group after completion of the buyback will become 42.02% of the post-buyback total paid-up equity share capital from 41.93% of the pre-buyback level. The aggregate shareholding of the public will become 57.98% post-buyback as against 58.07% at present, the company said.

On the necessity, Granules said the buyback, being implemented through the tender offer route, will help the company to distribute surplus cash to its equity shareholders thereby, enhancing the overall return to shareholders.