Ajanta Pharma Buyback 2024

Ajanta Pharma Ltd is a pharmaceutical company that mainly focuses on the research, production, and promotion of high-quality finished products in specialized areas. Recently, the company published its quarterly results along with an announcement of the board of Ajanta Pharma Ltd. approving the company’s fourth equity share buyback since 2020.

Buyback Offer 

On Thursday, Ajanta Pharma revealed its plan for a buyback worth Rs.285 Cr, targeting up to 10.28 lakh shares through a tender offer at Rs.2,770 per share, constituting a premium of 24%. The board has approved the repurchase of up to 10,28,881 equity shares (equivalent to 0.82% of the total equity shares) from shareholders as of the record date, which is set for May 30, 2024. This represents the fourth time Ajanta Pharma has undertaken a buyback program,  it shows their dedication to boost shareholder value. Prior buybacks happened in November 2020 and January 2022. In the last buyback, the company effectively conducted a share buyback worth Rs 315 crore at Rs 1,425 per share via the tender offer method, acquiring 22.1 lakh equity shares. 

Ajanta Pharma Buyback: Important Dates:

Ajanta Pharma Buyback: Important Details:

How to participate in buyback?

1. To be eligible for the buyback, investors must possess Ajanta Pharma Limited shares in either Demat or physical form as of the record date, which is set for May 30, 2024.
2. Following this, investors can engage in the buyback, commencing from a date to be updated. This involves selling their shares through their broker on either the NSE or BSE.
3. Subsequently, on a date to be updated, payment will be issued for accepted shares, while unaccepted shares will be returned to the investor’s Demat account.

Necessity

The necessity for the buyback has not been declared yet but this buyback presents shareholders with an opportunity to sell their holdings at a premium price while staying invested could result in a higher percentage of ownership and enhanced earnings per share. Therefore, investors should assess company fundamentals, along with their individual needs, objectives, and risk tolerance, to determine whether to retain their investment or take part in the buyback opportunity.

Financial Performance

In the latest financial report, Ajanta Pharma Ltd disclosed a significant 66% y-o-y increase in its PAT, amounting to Rs.203 Cr for the March quarter, compared to Rs.122 Cr in Q4 FY 2022-23. The company also noted a 20%  y-o-y growth in revenue from operations, reaching Rs.1,054 Cr compared to Rs 882 crore in the previous year. Additionally, the EBITDA  for the quarter stood at Rs.278 Cr, marking an 86% rise from Rs.149 Cr previously, with an EBITDA margin of 26%

Impact on Share Price

Ajanta Pharma shares experienced a significant 13.70% increase in its stock price during the morning trading session today, reaching a record high of Rs.2,540 per share. This surge comes on the heels of the company’s outstanding performance in both the quarter ending March and the entire fiscal year.

Conclusion: As the pharmaceutical sector undergoes swift changes, Ajanta Pharma seems to stand ready to seize emerging prospects by utilizing its expertise, strong research, development capacities, and expansive distribution channels. These strengths will be leveraged for a sustainable expansion and generate good value for all stakeholders.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.