KDDL Announces First-Ever Buyback of Equity Shares

The board of KDDL Ltd. has approved the company’s first-ever buyback of its equity shares. This significant corporate action will see KDDL repurchase up to 2.37 lakh equity shares, each with a face value of Rs 10, pending shareholder approval.

Buyback Details and Premium Price

The buyback price is set at Rs 3,700 per share, representing a 12% premium over KDDL’s closing price on Tuesday. The total consideration for the buyback will not exceed ₹88 crore. KDDL plans to repurchase up to 1.9% of the company’s total equity from shareholders, including participation from the company’s promoters.

Tender Offer Route

The buyback will be conducted via the tender offer route, meaning the company will repurchase the shares at the predetermined fixed price. Although KDDL has a history of regularly paying dividends, this is the first time the company is undertaking a share buyback. The last significant corporate action by KDDL was a rights issue in 2021.

KDDL’s Market Position and Performance

KDDL is a designer and marketer of watches and accessories, offering products such as machine dials and watch hands. On Wednesday, KDDL’s shares traded 2.26% higher, opening at Rs 3,327 and reaching an intraday high of Rs 3,420. The stock has risen by 17.3% in 2024 and has doubled in value over the past 12 months.

Company Background and Operations

Founded in 1981, KDDL produces watch components such as dials and hands, as well as precision engineering products under the Eigen brand. The company is a leading supplier of high-quality dials and hand-to-watch manufacturers in India and Switzerland. KDDL has a presence in Switzerland through its subsidiaries, Pylania SA and Estima AG, which trade and manufacture dials and hands for Swiss watch companies, respectively.

Ethos and Retail Presence

KDDL’s subsidiary, Ethos, was established in 2003 and is engaged in retailing luxury watches in India. Ethos offers various premium and luxury watch brands, including Omega, Jaeger-LeCoultre, Panerai, Bvlgari, and Tissot, among others. The company operates 63 retail stores across 24 cities in India as of May 13, 2024, including New Delhi, Mumbai, Bengaluru, Hyderabad, Chennai, and Kolkata.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.