Buyback Update: Balrampur Chini Mills Ltd

Balrampur Chini mills Ltd. is one of the largest integrated sugar manufacturers in India. Their business portfolio consist of manufacturing and marketing of sugar, ethyl, alcohol, ethanol, generation & selling of power & also manufacturing & marketing of organic manure. The Company possesses a cane crushing capacity of 76,500 tonnes per day, distillery capacity of 360 KL per day and saleable co-generation capacity of 163.20 megawatts.

Balrampur Chini reported strong Q4FY20 results with 31.1% growth in revenues led by 40% growth in sugar sales & 53.2% growth in distillery sales. The higher growth in sugar sales was led by 19.4% jump in sugar volumes aided by 1.7 lakh tonnes of sugar exports during the quarter.

The company has been able to reduce its sugar inventory by 39,000 tonnes in FY20. This
along with strong earnings led to the operating cash flow generation of 850 crore. The company reduced its working capital debt by 336 crore.

Buyback Details
Target Company	Balrampur Chini Mills Ltd.
Buyback Price	180/-
CMP	131/-
Premium (%)	37.4
Offer size No. of shares (In Cr.)	1
Offer size value (In Cr.)	180
Market Cap (In Cr.)	2,890
Buyback size to M.Cap	6.2%
Record Date	July 03, 2020

Buyback Scenario
			Acceptance Ratio
	Rs. /Share	6%	8%	12%
1,200 Shares @ 131/-			=	1,57,200/-
Buyback Price/No. of Shares	180/-	72	96	144
Buyback Realisation		12,960/-	17,280/-	25,920/-
Untendered Shares		1,128/-	1,104/-	1,056/-
We assume sell price of Untendered Shares and value	131/-	1,47,768/-	1,44,624/-	1,38,336/-
Total Sell value		1,60,728/-	1,61,904/-	1,64,256/-
Total Profit		3,528/-	4,704/-	7,056/-
Total Profit %		2.2%	3.0%	4.5%

Financials

(In Cr.)	2016	2017	2018	2019	2020
Sales	2,757	3,460	4,343	4,286	4,741
Total Income	2,803	3,485	4,373	4,329	4,785
Total Expenditure	2,629	2,696	3,986	3,693	4,161
EBIT	174	789	387	636	624
PAT	100	591	221	569	512
NPM (%)	3.6	17.1	5.1	13.3	10.8
ROE (%)	8.2	38.0	14.3	27.2	21.5
ROCE (%)	5.3	42.8	21.1	25.3	22.2
ROA (%)	2.7	14.7	6.3	12.2	10.8
Debt to Equity(x)	1.22	1.09	0.54	0.79	0.58

Share this