Aarti Drugs Approves Rs 59.85 Cr Share Buyback At 76% Premium

Aarti Drugs Ltd is a small cap pharma company which recorded a market cap of Rs 4,728.16 Cr during Friday's closing session. It ranks among the top manufacturers of metformin and is a major global producer of fluoroquinolones. With its wholly-owned subsidiary Pinnacle Life Science Private Limited, the company manufactures Active Pharmaceutical Ingredients (APIs), Pharma Intermediates, Specialty Chemicals, and Formulations.

On Friday, the Board of Directors of Aarti Drugs approved buyback proposal of up to 6,65,000 fully paid-up equity shares of face value of Rs. 10/-. The buyback size turns to Rs 59.85 Cr and the company has fixed Rs 900 per share for buyback of shares. Considering the buyback price of Aarti Drugs, the proposal is at a healthy premium of 76.26% based on the last traded price of Rs 510.60. The Board has fixed August 4, 2023 as the record date for the proposed buyback.

"The Buyback of up to 6,65,000 fully paid-up equity shares of face value of Rs. 10/- (Rupees Ten only) each of the Company ("Equity Shares") representing up to 0.72% of the paid up Equity Shares of the Company at a price of Rs. 900/- (Rupees Nine hundred Only) per Equity Share ("Buy Back Price") payable in cash for an aggregate amount of up to Rs. 59,85,00,000/- (Rupees fifty nine crore eighty five lakhs Only) ("Buyback Size"), which is 5.44% and 5.10% of the fully paid- up equity share capital and free reserves, as per the audited standalone and consolidated balance sheet, respectively, of the Company as on March 31, 2023," said Aarti Drugs in a stock exchange filing.

Aarti Drugs Limited recorded a 38.8% (YoY) rise in net consolidated profit from Rs 34.8 crore in Q1FY23 to Rs 48 crore in its Q1FY24 results, which were announced on Friday. On a year-over-year basis, the company's revenue increased by 6% from Rs 622.2 crore in Q1FY23 to Rs 661.7 crore in Q1FY24. EBITDA was Rs 84.7 crores in Q1 FY24 as opposed to Rs 67.4 crores in Q1 FY23.

On Friday, the shares of Aarti Drugs closed on the BSE at Rs 510.60 apiece down by 0.16% from the previous close of Rs 511.40. The stock made a 52-week-high of Rs 534.90 on (17/07/2023) and a 52-week-low of Rs 310.80 on (20/03/2023). During Q1FY24, the company reported promoter shareholding of 58.70%, FIIs stake of 1.97%, DIIs stake of 4.72% and public stake of 34.63%.