SM Auto Stamping Limited Buyback: All You Need to Know

SM Auto Stamping Limited has announced a buyback plan involving up to 600,000 (six lakh) equity shares. This represents about 4.19% of the company’s paid-up equity share capital. The buyback price is set at Rs. 60 (Rupees sixty) per share, with the total cash consideration for the buyback not exceeding Rs. 3.6 crore (Rupees three crore sixty lakh).

SM Auto Stamping Limited- Company Details

Founded in 2006 and headquartered in Nashik, SM Auto Stamping Ltd (SMASL) is a key player in manufacturing precision sheet metal stamping and deep-drawn components, including welded assemblies & press tools. The company is focused on meeting clients’ specific needs in the automobile and engineering sectors, offering solutions that encompass complex sheet metal pressed designs, components, welding fixtures, top-tier stamping dies, and high-tonnage stamped components. SMASL is known for its supply of products to TS 16949-certified clients.

With its operations spread across three manufacturing units in Nashik, Mumbai, and Pune in Maharashtra, SMASL boasts an annual production capacity of 6 million components. The company employs a workforce of 350, both directly and indirectly. Its product portfolio includes automotive clutches, propeller shaft drives, brake systems, and body trims.

SMASL prides itself on its competitive strengths, including adherence to high-quality production standards, a diverse range of sheet metal components, and establishing long-standing relationships with its customers.

SM Auto Stamping Limited Financials

SM Auto Stamping Limited experienced a significant revenue increase of 26.65% in the fiscal year that concluded on March 31, 2023, compared to the year ending on March 31, 2022. Despite this revenue growth, the company decreased its profit after tax (PAT) by 15.16% during the same timeframe.

SM Auto Stamping Limited Buyback Detail

SM Auto Stamping Buyback 2023 Issue Timetable

SM Auto Stamping Limited is initiating a buyback for several strategic reasons, primarily focused on optimising shareholder value and efficiently managing surplus funds. The key motives for the buyback include:

• The buyback presents an opportunity for the company to redistribute excess cash to its equity shareholders, thereby boosting their overall returns.
• Implemented through the tender offer route as outlined by SEBI Buyback Regulations, this buyback will allocate a certain number of shares based on entitlement, or 15% of the total shares being repurchased, whichever is higher, specifically for small shareholders. This approach aligns with the definition of ‘small shareholders’ in Regulation 2(i)(n) of the SEBI Buyback Regulations and is expected to benefit a significant portion of public shareholders falling under this category.
• The initiative is anticipated to enhance the return on equity by reducing the equity base, which could lead to a long-term increase in shareholder value.
• The buyback also provides a flexible option for the company’s equity shareholders. They can either participate in the buyback and receive cash instead of their shares or choose not to participate. Those not participating might see an increase in their relative shareholding percentage post-buyback without the need for additional investment.

Lead Manager for SM Auto Stamping Limited Buyback

The lead manager for SM Auto Stamping Limited Buyback is Saffron Capital Advisors Private Limited.

How to Check Allotment Status

The registrar for SM Auto Stamping Limited Buyback is Bigshare Services Pvt Ltd. To check your allotment status, please click on this link https://ipo.bigshareonline.com/ipo_status.html

FAQs

1. When is the issue period for the SM Auto Stamping Limited Buyback?

The exact dates for the buyback offer are December 29, 2023 – January 4, 2024.

2. What is the buyback price per share?

The buyback price is Rs 60 per share.

3. What is the face value of SM Auto Stamping Limited shares?

The face value of the shares is Rs 10 per share.

4. Where is SM Auto Stamping Limited listed?

The company is listed on the Bombay Stock Exchange (BSE).

5. How will the buyback benefit small shareholders?

The buyback is designed to allocate a certain number of shares for small shareholders, either based on their entitlement or 15% of the total shares being repurchased, whichever is higher. This is in line with the SEBI Buyback Regulations.

6. What are the financial highlights of SM Auto Stamping Limited?

For the financial year ending March 31, 2023, the company reported a revenue increase of 26.65% but saw a 15.16% decrease in profit after tax (PAT).

7. Who are the lead managers for the buyback?

Saffron Capital Advisors Private Limited is the lead manager for the buyback.

8. How can investors check the allotment status of the buyback?

Investors can check their allotment status through Bigshare Services Pvt Ltd’s website: SM Auto Stamping Buyback Allotment Status.

9. What are the competitive strengths of SM Auto Stamping Limited?

SM Auto Stamping Limited prides itself on high-quality production standards, a wide range of sheet metal components, and long-term relationships with its customers.

10. What is the record date for participating in the buyback?

The record date is set for December 22, 2023.

11. Why is SM Auto Stamping Limited undertaking this buyback?

The buyback is aimed at redistributing surplus cash to shareholders, enhancing return on equity, and providing shareholders with an option to sell their shares back to the company or increase their percentage holding post-buyback.