Spl situation investing- eClerx Buyback

December 27, 2017

GH/Client Note/37/2017

Dear Client

This is a “quick & dirty” analysis of recently announced buybacks for Alembic Limited.

Buyback (BB) details

BB amount 82 Rs. Cr.

BB price 80 Rs/Share
BB Quantity 102.5 L Shares
Retail portion for BB 15.4 L Shares
SH with up to 3000 shares 247.6 L Shares, as at March 31, 2017
Theoretical acceptance ratio 1:16.1
BB schedule Yet to be announced

Scenario for a short-term investment (~three to four months)

 Based purchase price of 3,000 shares @Rs.63, post buyback price@ Rs.60, and 3 months time frame:
Acceptance Accepted BB Remaining Total
ratio shares receipt value Value Profit/(loss) Profit/(loss) Annualized
16.10 186 14,880 1,68,840 1,83,720 -5,280 -2.8% -8.4%
12.00 250 20,000 1,65,000 1,85,000 -4,000 -2.1% -6.3%
10.00 300 24,000 1,62,000 1,86,000 -3,000 -1.6% -4.8%
8.00 375 30,000 1,57,500 1,87,500 -1,500 -0.8% -2.4%

 The above calculation is without considering taxes and transaction costs

 Because of low theoretical acceptance ratio, the offer is not attractive, which may be the reason that
stock didn’t appreciated after buyback announcement

 At acceptance ratio of 7 (1 share accepted per 7 shares’ holding) breakeven is achieved. Investment
with a hope for substantially better acceptance ratio than this, is not advisable

DISCLAIMER: Topics discussed in this document are for educational and information purposes only and not a recommendation to trade
into Equity or any other asset class discussed here. For any investment decision, please contact a certified investment advisor.
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 The stock was trading around Rs.40/sh few months ago. For those investors, it may make sense to
participate in the buyback

 AVOID any fresh investment just for buyback, is the conclusion!

DISCLAIMER: Topics discussed in this document are for educational and information purposes only and not a recommendation to
trade into Equity or any other asset class discussed here. For any investment decision, please contact a certified investment advisor.