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Greaves Cotton Limited, a diversified engineering company that is a leading manufacturer and marketer of diesel engines, petrol engines, generator sets, pump sets, and construction equipment. With a 160-year-old engineering legacy spreading across India and a growing global presence, we take pride in our quality products and services.

(i) Agri Equipment: Manufactures and market agri equipment and is a market leader in petrol/ kerosene engines. The product range includes such as lightweight petrol, diesel engines, pump sets, power tillers, reapers, and mini-farming equipment, etc. The manufacturing facility is located at Gummidipondi (TN).

(ii) Automotive: Manufactures light diesel engines for automotive application (4.4 to 25 HP) for three and four wheeler small commercial vehicles. Greaves is the market leader in single and twin cylinder diesel engine. The manufacturing facility is located at Aurangabad and Ranipet (TN).

(iii) Auxiliary Power and Industrial Engine: Manufactures diesel and gas gensets in the range of 50-500 KVA, engines for marine, fire fighting pump sets, mining, rail cars, etc. The manufacturing facility is located at Pune. The diesel engines range from 1.4 to 750 HP range with an option for CNG/LPG fuel.

(iv) Construction Equipment: Manufacture range of compaction, concreting and earthmoving equipment. The manufacturing facility is located at Gummidipondi (TN).

Buy Back Offer Deal:

Buyback Type: Tender Offer
Buyback Offer Amount: ₹ 240 Cr
Date of Board Meeting approving the proposal: May 02 2019
Date of Public Announcement: May 02 2019
Buyback Offer Size: 5.16%
Buyback Number of Shares: 13714286
Price Type: Tender Offer
FV: 2
Buyback Price: ₹ 175 Per Equity Share

Details of Buyback:

(i) The Board of Directors of Greaves Cotton Limited at its meeting held on 2nd May 2019, has approved a proposal to buy back up to 1 ,37, 14,286 Equity Shares of the Company which is 5.6% of the total paid-up equity share capital (the "Buyback"), at a tender price of Rs. 175 for an aggregate amount, not exceeding Rs. 240 Crores (Rupees Two Forty Crores only). (ii)  The Buyback is subject to necessary permissions, sanctions, approval of the members by means of a special resolution through a postal ballot.

Salient financial parameters:

Particulars(Cr) Mar-18 Mar-17 Mar-16
Revenue 1,837.39 1,684.45 1,660.73
Expenses 1,589.97 1,438.30 1,394.00
Profit/Loss 202.62 180.63 198.78
EBITDA Margins 16.55% 17.16% 18.06%
PAT Margins 11.03% 10.72% 11.97%
EPS 8.28 7.4 8.21

IZ VIEW 1. The company has shown a 10% growth in the last 3 years in terms of Revenue and timid growth of 2% in PAT. 2. The EBITDA Margins are going southwards in the last 3 years. 3. The Company's share price in the last 4 years( July-15 to May-19) is toggling between 130 to 150 levels. So it has made very less money for investors in terms of share appreciation. However, the company is continuously giving dividends. From (July-15 to May-19), the company has given Rs. 21.6 dividends per share to its shareholders. So by considering dividend the total CAGR return in the last 4 years are 10.63%. 4.  The company caters to Auto Sector and the same is going through a very tough time. Auto Numbers for all the leading companies are very disappointing. So yes, tough times ahead for Greaves Cotton as well. 5.  The share is currently trading at P/E of 21 on the basis of FY18-19 Financials.

How to Participate in buyback?

1. Firstly to be eligible for the buyback the investor should have shares of Greaves Cotton Limited Buyback Offer 2019 in demat or physical form as on record date. [ Not Announced Yet ]. 2. Once you have shares in demat, you can participate in the buyback process which is opening from [ Not Announced Yet ] by selling your shares through your broker on NSE or BSE. 3. Then on [ Not Announced Yet ], the payment will be given to you for accepted shares and unaccepted shares will be returned to your demat account.

Profit from the buyback on the bases of acceptance Ratio:

Buy 1142 Shares at CMP of Rs. 148 [2,00,000/175 =1142)

Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback 1,69,142 1,69,142 1,69,142 1,69,142
No. of Shares buyback 376 571 856 1142
BuyBack Profit 10,152 15,417 23,112 30,834
Profit 6% 9.11% 13.6% 18.2%
in Stocks by (3.9k points)
79% Accept Rate
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