Buyback is a tool in the hands of the managements of cash rich companies wherein the shares are bought back by the company for:
1. Enhancing the intrinsic worth of shares by cutting the flab of floating stock
2. Making the company closely held and getting the same delisted
3. Providing a defensive mechanism against hostile takeover attempts
4. Rationalizing the capital structure by writing off the capital not represented by available assets.
The investment banker plays an important role in the equity restructuring of a company, mainly in the area of share buy-back. However, the real need for an investment banker in equity restructuring is to play role of merchant banker for a proposed share buy-back, as a part of the restructuring programme.
The major contribution that the merchant banker makes in such assignment, apart from managing offer, is in advising the company on the proper method to be adopted for the buy-back and to price buy-back accordingly.
The pricing becomes critical because if the buy-back is under-priced, then the offer may not be successful.
The pricing also has its bearing on market capitalization of the company. Therefore, the role of the merchant banker becomes extremely important.
The procedure for buyback involves compliance of the provisions of Company Law and SEBI Regulations.
Takeover is technically known as Substantial Acquisition of Shares.
The purpose of a Takeover is to gain management control of the Target Company. Plans of Horizontal Diversification, Elimination of Competition, Backward and Forward Integration are the motives behind any Takeover bid.
The Taking-over Company buys the shares of the Target Company by making an offer to the existing shareholders at a specified price.
In both the above instances, a Merchant Banker has to be appointed to facilitate the offerings. Like in the case of Capital Issues, the process starts with the company executing an MOU with us.
The Due Diligence exercise is carried out in accordance with the relevant SEBI Rules/Regulations/Guidelines followed by the preparation of the legal documentation connected with Buybacks and Takeovers.
The Investment Banking Team consists of well-qualified and experienced professionals plays a major role in buy back and takeovers.
1. Enhancing the intrinsic worth of shares by cutting the flab of floating stock
2. Making the company closely held and getting the same delisted
3. Providing a defensive mechanism against hostile takeover attempts
4. Rationalizing the capital structure by writing off the capital not represented by available assets.
The investment banker plays an important role in the equity restructuring of a company, mainly in the area of share buy-back. However, the real need for an investment banker in equity restructuring is to play role of merchant banker for a proposed share buy-back, as a part of the restructuring programme.
The major contribution that the merchant banker makes in such assignment, apart from managing offer, is in advising the company on the proper method to be adopted for the buy-back and to price buy-back accordingly.
The pricing becomes critical because if the buy-back is under-priced, then the offer may not be successful.
The pricing also has its bearing on market capitalization of the company. Therefore, the role of the merchant banker becomes extremely important.
The procedure for buyback involves compliance of the provisions of Company Law and SEBI Regulations.
Takeover is technically known as Substantial Acquisition of Shares.
The purpose of a Takeover is to gain management control of the Target Company. Plans of Horizontal Diversification, Elimination of Competition, Backward and Forward Integration are the motives behind any Takeover bid.
The Taking-over Company buys the shares of the Target Company by making an offer to the existing shareholders at a specified price.
In both the above instances, a Merchant Banker has to be appointed to facilitate the offerings. Like in the case of Capital Issues, the process starts with the company executing an MOU with us.
The Due Diligence exercise is carried out in accordance with the relevant SEBI Rules/Regulations/Guidelines followed by the preparation of the legal documentation connected with Buybacks and Takeovers.
The Investment Banking Team consists of well-qualified and experienced professionals plays a major role in buy back and takeovers.