Welspun Enterprises' Buyback, A Return Opportunity In Next 2-3 Months: Axis Securities

Axis Securities Report

Welspun Enterprises Ltd. has come up with a buyback opportunity wherein buyback for 1.18 crore shares at a price of Rs 200 for an aggregate amount not exceeding 235 cruising the tender route. This represents 14.22% of the aggregate of the company’s total paid-up share capital.

We recommend the below strategies for Welspun Enterprises' buyback:

• Small shareholder (investment not more than two lacs): Reserved 15% of total tender offer-

- Scenario I - Minimum acceptance ratio is 13% when all participants tender 100% of their shares.

- Scenario II - Minimum acceptance ratio is 18% when 70% participation is assumed by small retail holders.

- We expect a Return of 2.3%-3.1% assuming the currenc market price is the price post buyback in this scenario in the next two-three months

• General category (investment exceeding two lacs) -

- Scenario I - Minimum acceptance ratio is 17% when all participants tender 100% of their shares.

- Scenario II - Minimum acceptance ratio is 22% where participants unlikely to participate are eliminated from the total offer calculation.

- We expect a return of 3%-3.8% assuming the CMP is the price post buyback.

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