Key Points of Share Buyback:
- Ajanta Pharma Ltd. has approved its third share buyback in as many years during its board meeting.
- The buyback is for 22.1 lakh equity shares of face value of Rs 2 each, representing 2.59 percent of the total number of equity shares of the company.
- The buyback will be carried out at Rs 1,425 apiece, which is a premium of 16.2 percent to Thursday’s closing price of the stock.
- The total buyback consideration amounts to Rs 315 crore.
- Promoters and promoter group held 66.1 percent stake in the company as of March 3, 2023, while FIIs held 10.3 percent stake.
- Another 13.7 percent stake is held by financial institutions, mutual funds, and banks, and public shareholding stands at 9.86 percent.
- Natco Pharma has also announced a buyback of a maximum of 30 lakh shares, or 1.64 percent of equity, via open market.
- Despite the drop in net profit, equity research firm ICICI Direct advised investors to ‘buy’ Ajanta Pharma’s stock with a price target of Rs 1,385 per share, citing its strong execution track record and financials.
Details of Share Buyback:
Ajanta Pharma Announces Third Share Buyback in Three Years
On Friday, Ajanta Pharma Ltd. approved its third share buyback in as many years during its board meeting. The pharmaceutical company’s board has approved the buyback of 22.1 lakh equity shares of face value of Rs 2 each through the tender offer route, representing 2.59 percent of the total number of equity shares of the company.
The buyback will be carried out at Rs 1,425 apiece, which is a premium of 16.2 percent to Thursday’s closing price of the stock. The total buyback consideration amounts to Rs 315 crore. Notably, promoters and promoter group held 66.1 percent stake in the company as of March 3, 2023, while FIIs held 10.3 percent stake. Another 13.7 percent stake is held by financial institutions, mutual funds, and banks, and public shareholding stands at 9.86 percent.
Ajanta Pharma’s previous buybacks occurred in November 2020 and January 2022. Interestingly, on March 8, another pharmaceutical major, Natco Pharma, also announced a buyback of its equity shares.
Natco Pharma has approved a buyback of a maximum of 30 lakh shares, or 1.64 percent of equity, via open market. The company will buy back fully paid-up equity shares of face value of Rs 2 each at a price not exceeding Rs 700 per share, amounting to a total of Rs 210 crore.
Ajanta Pharma’s consolidated net profit dropped nearly 30 percent year-on-year to Rs 134.5 crore during the December quarter compared with Rs 191.8 crore in the year-ago quarter, while revenue grew 16 percent to Rs 972 crore mainly due to growth from India business.
Despite the drop in net profit, equity research firm ICICI Direct advised investors to ‘buy’ Ajanta Pharma’s stock with a price target of Rs 1,385 per share, citing its strong execution track record and financials, making it a compelling play on branded generics, with nearly 72 percent exposure.
About Ajanta Pharma:
Ajanta Pharma is a global specialty pharmaceutical company that supplies high-quality medications to over 30 countries worldwide. The company has established itself as a leader in various therapeutic segments and multiple molecules by introducing innovative products to the market before its competitors.
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