This thread is important for every investor who invest in Equity Market
Topics Covered: 1. What is Buyback? 2. Why buyback is important for every investor? 3. How to invest & participate in Buyback? 4. What not to do to avoid Buyback failure?
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What is Buyback?
When a company repurchases its outstanding share from the market it is a case of Buyback.
Buyback reduces the number of shares from the market, and automatically increases the value of remaining shares. However, the cash of the company gets deployed.
Why is Buyback important?
1. Always be interested when your portfolio company is coming up with buyback
Buyback is a mechanism used by a company to reward its shareholders apart from dividend.
In order to participate in retail category one can apply for less than 90 number of shares.
As per AR 2020, number of shares in hand of retailers is around 22 Lacs (Assuming nos. in conservative manner).
Scenario Analysis:
However not all the people participate in buyback.
With 3 different scenario of 50%, 70% & 90% retail shareholders applying in buyback, the tender acceptance ratio would turn out to be 13%, 9% and 7% respectively.
Interesting Facts about Tyre Industry and, where JK Tyre is Positioned.
"Indian tyre Industry poised to grow at early double digit for the coming few year"
Source: From Business Indian Magazine
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India has prominent place in Tyre industry.
Out of top 25 global tyre business, India has 4 prominent players
- Apollo tyre: Ranks 14
- MRF rRanks 15
- JK Tyre Ranks 24
- Ceat Tyre Ranks 25
In India, 41 tyre companies operate in India with 66 tyre plants spread across country.
Production:
• Avg growth rate over a decade is close to 9%. First half had high growth of 15%, which fell to 4% in the 2nd half.
• From 2014-20, tyre production shot up from 146.1Mil units to 176.7Mil units.
• Peak production happened in 2019. Total output touched 192mil unit
Decoding the opportunities in Ethanol Blending in India and how certain sector can benefit out of it.
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Data-facts:
• 98% of India fuel requirement in road transportation is met through fossil fuel.
• Bio fuels only consist about 2% of use for road transportation.
• Ethanol is the important part of biofuel. It is naturally produced from fermentation of sugar by years or via petrochemical process such as ethylene hydration.
• Combined ethanol distillation capacity of India is 684 crore litres