Triveni Engineering and Industries Ltd, a mid-cap company has announced a ₹ 800 crore buyback. Further, it informed the bourses that it has divested its stake in an associate company, Triveni Turbine Ltd, adding to the recognition of its exceptional income.
Triveni Engineering and Industries is an integrated sugar manufacturing company, which is also involved in manufacturing high-speed gears and project implementation in the fields of water and waste-water treatment and pollution control. Its shares closed at ₹ 277.85 apiece on Monday.
Divestment in Triveni Turbines
Triveni Engineering informed the exchanges that it has divested the entire equity stake that it held in its associate company, Triveni Turbine Ltd. This has resulted in a profit of ₹ 1,58,594 lakhs on such disposal, which is reflected under exceptional items in its standalone statement of cash flows. As a result, Triveni Turbines has ceased to be an associate company of Triveni Engineering and Industries, with effect from September 21, 2022.
Buyback
The company’s board in a meeting held on November 05, 2022, has approved the proposal for a ₹ 800 crore-share buyback through the tender offer route. The shares have a face value of ₹ 1 each and the buyback price has been fixed at a price of ₹ 350 per share, at a premium of 26% above the current share price. The record date for the same will be fixed subsequently.
The company will buy back up to 54,28,571 equity shares, representing 1.68 per cent of the fully-paid up equity share capital of the company. The buyback offer size represents 24.79 per cent and 22.86 per cent of the aggregate of the company’s fully paid-up equity capital and free reserves as per the standalone and consolidated audited financial statements of the company.
The equity shares are to be bought back at the Buyback Offer Price (₹ 350) shall not exceed 2,28,57,142 equity shares, representing 9.45%, of the total number of equity shares in the total paid-up equity capital of the company as on September 30, 2022.
The Buyback Offer Size represents 24.51 % and 24.48% of the aggregate of the company’s fully paid-up equity capital and free reserves as per the latest standalone and consolidated audited financial statements of the company, respectively, for the half year ended September 30, 2022, which is less than 25% of the aggregate of the total paid-up capital and free reserves of the company.
Multibagger returns
Triveni Engineering & Industries Ltd has given multibagger returns of 194.74% in the past five years, as its share price increased from ₹ 93.30 to ₹ 275.00. Therefore, if an investor would have invested ₹ 1 lakh in the shares of the company five years ago, the value of their holdings would have been ₹ 2.94 lakhs today!
Triveni Engineering and Industries Ltd is a mid-cap company with a market capitalization of ₹ 6,548 crores. It has a good return on equity of 24.45% and an ideal debt-to-equity ratio of 0.82. Its shares are trading at a price-to-equity ratio (PE) of 16.44, which is lower than the industry PE of 21.63, indicating that the stock might be undervalued.
Quarterly Results
The company on Saturday reported a 1400% jump in its consolidated profit to ₹ 1,387.76 crores for the quarter that ended September (Q2FY23). Its net profit stood at ₹ 92.47 crores during the same period a year ago.
Its total income rose to ₹ 1,483.33 crore in September 2022, up 27.47%, as compared to ₹ 1163.66 crore in the corresponding quarter last year.
Written by Simran Bafna
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